#Germany’s world-beating chipmaker may move more production to US

Munich-based Infineon is considering moving a bigger chunk of its production to the US, the FT reports. The prospective move would be made to comply with the Biden Administrations’ Inflation Reduction Act (IRA) — a $369bn package of subsidies and tax incentives, aiming to accelerate domestic production of green technologies, which include semiconductors.

Infineon is amongst the world’s biggest silicon chip suppliers for the automotive industry. It already operates six factories in the US, next to eight in Asia, and five in Europe, where Germany counts three facilities.

Peter Wawer, head of the chipmaker’s green technology division, told the FT that the company’s reviewing the IRA’s requirements associated with the value of goods manufactured in the country.

Waver said that Infineon is satisfied with its current share of value, but that it has to ensure this percentage doesn’t exclude it from business and that it “might need to transfer a certain amount of product, or certain additional manufacturing, into the US.”

Meanwhile, Intel’s long-awaited chip plant in Germany hangs in the balance, after the federal government refused to provide extra state funding for the project. If Germany and Intel don’t reach an agreement, Europe will lose its expected largest semiconductor facility.

Attracting foreign chipmakers to the continent, while incentivising domestic ones to expand their production capacity within the bloc is a key element of EU’s strategy to boost its semiconductor industry — but it doesn’t seem as if it’ll be an easy task.