Controversial Statement
As the German government enters subsidy negotiations with Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest foundry, American foundry company GlobalFoundries has openly criticized these subsidies, stirring controversy both within and without Germany.
On July 24 (local time), Thomas Caulfield, CEO of GlobalFoundries, expressed his opposition to the German government’s subsidy of TSMC during an interview with a British economic publication. Caulfield stated, “If a company with market dominance disproportionately benefits from subsidies, it leads to dependence on a single supplier, market barriers, and a lack of supply chain resilience.” He emphasized, “It is crucial to ensure all government investments foster healthy competition and do not recklessly distort the market.”
Caulfield’s comments come amid ongoing subsidy negotiations between TSMC and the German government. According to Bloomberg, TSMC is considering building a new semiconductor factory in Dresden, with the German government reportedly supporting half of the total investment, approximately 5 billion euros.
GlobalFoundries has a large semiconductor factory in Dresden. It was established when AMD, an American semiconductor company, sold off its foundry division in 2009. Prior to the spin-off, AMD had built and operated the foundry in Dresden since 1996. As the semiconductor power struggle intensified last year, GlobalFoundries aligned with the local government to expand its German plant.
In this context, news of the German government providing substantial subsidies and the potential attraction of a TSMC factory soon led CEO Caulfield, who feared being out-competed, to make these assertive statements.
The German government is reportedly planning to support the semiconductor manufacturing sector with 20 billion euros. The government previously agreed to provide 9.9 billion euros for a new Intel factory in the Magdeburg region, amounting to about one third of the total investment in the facility. When Intel expressed dissatisfaction with rising energy and construction costs, the German government increased the scale of the planned subsidy from 6.8 billion euros to 9.9 billion euros.