GlobalFoundries opposes TSMC subsidy for new fab near Dresden

GlobalFoundries opposes government subsidy for TSMC fab near Dresden, citing legal concerns.

GlobalFoundries opposes TSMC subsidy for new fab near Dresden
Published by Ethan @ PC Game Spotlight 9 months ago

GlobalFoundries Opposes TSMC Subsidy

The rivalry between GlobalFoundries and TSMC is getting more heated, as the two foundries compete for market dominance. Following the recent news that TSMC would build a new fab near Dresden, which will enable the company to produce chips that directly compete with GlobalFoundries products, the troubled Taiwanese foundry has received significant government subsidies. This has led to concerns among GlobalFoundries and the wider industry, as the German government’s decision could give TSMC an unfair advantage.

The new TSMC fab is scheduled to be operational sometime in 2023, and the total cost is expected to be around €10 billion. Half of this will come from German government subsidies, giving TSMC a considerable advantage over its competitors.

GlobalFoundries, which has a fab near Dresden, feels disadvantaged by this move, and has already taken action. The company has registered its concerns with the EU Commission, which oversees potential violations of European laws on state aid.

“We have identified the potential for state aid and have filed a complaint with the European Commission to ensure that a level playing field is maintained and fair competition prevails,” GlobalFoundries spokesperson Markus Pohlor tells EE Times.

“We do not believe that the subsidy aligns with European laws, and we have already notified the EU Commission of our concerns. A formal complaint may be filed once the project is officially registered in Brussels,” Pohlor adds.

GlobalFoundries wants a scenario where it can compete on an equal footing with TSMC, as the latter’s new fab will enable the company to outspend its competitors.

“We believe that all of the industry players should be on a level playing field and have the ability to compete with each other based on the merit of their technology and innovation,” Pohlor says.

GlobalFoundries has also engaged in lobbying efforts with the German government, as it wants the same support that TSMC will receive. The company cites less state aid compared to TSMC, and sees itself as a co-founder of the technology cluster ‘Silicon Saxony’ in Dresden.

“We have engaged with the German government and our partners in Silicon Saxony to express our concerns and to advocate for support that will enable us to compete in the global marketplace and sustain the technology leadership in Dresden,” Pohlor says.

The German government’s decision could have significant implications for the semiconductor industry. The situation also highlights the intense competition and strategic importance of semiconductor fabrication, which is poised to become the centre of a multi-billion dollar battle for market dominance.

Featured image courtesy of Flickr.

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