GlobalFoundries Criticizes German Subsidies to Rival TSMC

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GlobalFoundries opposes German government's subsidies to rival TSMC.

GlobalFoundries
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GlobalFoundries opposes the German government's plan to subsidize TSMC's new fab near Dresden. The subsidy amounts to up to €5 billion, which GlobalFoundries argues will further strengthen TSMC's already dominant market position. The situation has led to legal concerns, lobbying efforts, and a potential formal complaint to the EU Commission by GlobalFoundries, reports Handelsblatt.

Earlier this month, TSMC, in collaboration with partners Bosch, Infineon, and NXP, unveiled plans to build a 12nm and 16nm-capable fab near Dresden, Germany. The fab is expected to cost €10 billion, and half of the sum will likely come from the German government via various subsidies. GlobalFoundries, which has a fab near Dresden, feels disadvantaged by this move. 

GlobalFoundries is lobbying the German government for similar support. The company argues that it has received far less state aid in its 25 years of Dresden operation than what TSMC is set to receive. GlobalFoundries, which inherited its fab from AMD, sees itself as a co-founder of the technology cluster 'Silicon Saxony' in Dresden and believes it should also be considered for state aid.

Saam Azar, responsible for government and legal affairs at GlobalFoundries, stated that TSMC aims to produce semiconductors that directly compete with products made by GlobalFundries. Moreover, TSMC plans to collaborate with three of GlobalFoundries' biggest customers: Infineon, Bosch, and NXP.

The situation has led Globalfoundries to register its concerns with the EU Commission. The company questions whether the massive subsidy to TSMC aligns with European laws. Saam Azar indicated that a formal complaint might also be filed as soon as the German government and TSMC officially register the project in Brussels.

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

7 Comments Comment from the forums
  • gg83
    They abandoned the leading edge nodes smaller than 12nm. What do they think the deserve? Do they think 5 billion euros would let them leapfrog to 2nm?
    Reply
  • zipspyder
    GF should try doing some current R&D before crying for more subsidies.
    Reply
  • magnum29
    Completely agree. Why does the largest contract manufacturer, with the most advanced process node, need more subsidies? Given the capital intensive nature of the industry, directing more money towards the most successful player is illogical and anti-competitive, especially since they won't even be producing anything that a smaller player couldn't also produce.
    Reply
  • Dingledooda
    gg83 said:
    They abandoned the leading edge nodes smaller than 12nm. What do they think the deserve? Do they think 5 billion euros would let them leapfrog to 2nm?

    To be fair to GF, TSMC isn't spending the money on leading edge or even 5/7nm but on 12/16nm.
    Reply
  • dk382
    I'm against government subsidies this large to corporations in general, but it's extra stupid when it goes to the biggest corporation in the industry while the smaller players are left out. It's not even going toward a leading-edge node, but instead it'll be used to produce a class of product several smaller players are more than capable of producing. I'd be seriously mad if I were German. Does one of the world's richest corporations really need the subsidies?
    Reply
  • gg83
    magnum29 said:
    Completely agree. Why does the largest contract manufacturer, with the most advanced process node, need more subsidies? Given the capital intensive nature of the industry, directing more money towards the most successful player is illogical and anti-competitive, especially since they won't even be producing anything that a smaller player couldn't also produce.
    Very good point. It would be different if TSMC were building a 2nm fab. Thanks for pointing that out.
    Reply
  • frogr
    If GF wants subsidies, then they should propose a new facility in Germany. A new fab or R&D facility for example.
    Reply