Germany Diverts €3B Semiconductor Subsidy to Infrastructure Repairs

Germany's ambitious plan to reclaim a leading position in the global semiconductor industry has hit a roadblock. The government will reallocate €3 billion ($3.5 billion) from its chip subsidy budget to address urgent infrastructure repairs, including crumbling roads and bridges. Vice Chancellor Lars Klingbeil described the decision as a "difficult but responsible choice" during Thursday's press conference.

The funds were originally earmarked for domestic microelectronics production under a €15 billion ($17.4 billion) subsidy program spanning 2025-2028. This strategic pivot comes as Germany grapples with fiscal constraints and follows Intel's cancellation of a $34.7 billion Magdeburg chip plant earlier this year due to cost pressures.

The reallocation raises questions about Europe's technological sovereignty ambitions at a time when global supply chain resilience remains paramount. Berlin's MOVE underscores the tension between immediate infrastructure needs and long-term industrial policy goals in the face of economic headwinds.