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Wolfspeed announced plans to build a factory in Germany.

 Wolf­speed has announced plans to build a €3bn fact­ory in west­ern Ger­many. Offi­cials said it showed

chip
Europe can com­pete against US sub­sidies.—A US chip­maker has announced plans to build a €3bn fact­ory in west­ern Ger­many in a move hailed by Chan­cel­lor Olaf Scholz as a sign that Europe can com­pete against power­ful US green sub­sidies.

The fact­ory, on the site of a decom­mis­sioned coal plant in the region of Saar­land, will be built by the US semi­con­ductor pro­du­cer Wolf­speed and will pro­duce sil­icon carbide chips for elec­tric vehicles and indus­trial use.

The Saar­land announce­ment is rel­at­ively small com­pared with other recent invest­ments in semi­con­duct­ors, such as the decision last year by US com­pany Intel to spend €17bn on a giant new chip man­u­fac­tur­ing plant in the Ger­man city of Mag­de­burg. But it comes as the EU seeks to encour­age a significant increase in European man­u­fac­tur­ing of the chips used in com­puters, smart­phones, vehicles and a range of other products and devices to reduce the vul­ner­ab­il­ity of its sup­ply chains and limit its depend­ence on Asia and the US.

The area is deeply depend­ent on the auto industry, which employs some 44,000 staff in a region with a pop­u­la­tion of 1mn, but has been hit by clos­ures. For example, Ford announced last month it was con­sid­er­ing selling its plant in the state.

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