Wolfspeed, based in North Carolina, has postponed its $3 billion semiconductor plant project in Saarland, Germany, signaling challenges in the European Union’s efforts to bolster its semiconductor production and reduce dependence on Asian suppliers.
Originally slated for construction, the Saarland plant’s development has been deferred until at least mid-2025 due to reduced capital spending prompted by downturns in the European and U.S. electric vehicle markets. The company remains committed to seeking funding for the project, although no construction will commence until the specified timeframe.
The delay underscores broader struggles across Europe to materialize semiconductor production initiatives, despite initiatives such as the EU Chips Act of 2022. This legislation aimed to mobilize 43 billion euros ($47 billion) in public and private investments to fortify the region’s semiconductor industry post-COVID-19 supply chain disruptions.
However, progress has been sluggish, with few projects achieving European Commission approval for crucial state aid, which is essential for financial viability. This setback impedes the EU’s ambition to capture 20% of the global semiconductor market share by 2030, a target deemed unrealistic by industry experts given the sector’s interconnectedness and Europe’s vulnerability to external market shocks.
In contrast to Wolfspeed’s setback, some projects are advancing. TSMC plans to commence construction on an $11 billion facility in Dresden, Germany, this year, in collaboration with industry leaders like Robert Bosch, NXP, and Infineon. Similarly, STMicroelectronics recently secured EU approval for a 5 billion-euro silicon carbide plant in Italy, while Onsemi awaits approval for expanding its operations in the Czech Republic.
Intel’s mammoth $33 billion semiconductor plant in Magdeburg, intended to be Europe’s largest, has also encountered delays due to regulatory soil preservation requirements, pushing its completion toward the late 2020s.
Despite challenges, some semiconductor ventures are progressing, highlighting ongoing efforts within the EU to strengthen domestic semiconductor capabilities amid geopolitical tensions and supply chain vulnerabilities.
This delay in Wolfspeed’s German project underscores the complexities and hurdles faced in realizing Europe’s ambitions for semiconductor self-sufficiency, amid broader economic uncertainties and regulatory challenges.
