German chip supplier ZF Friedrichshafen (ZFF.UL) and U.S. chipmaker Wolfspeed (WOLF.N) will announce plans to build an electric vehicle chip plant in the Saarland region.
Chancellor Olaf Scholz and Economy Minister Robert Habeck will attend the event. This a sign that the government expects to get approval from Brussels to subsidise the plant and start construction.
The move comes as governments in Europe jockey for new industrial projects amid unease that subsidies on offer in the United States. The Inflation Reduction Act (IRA) will lure planned investments in Europe across the Atlantic.
“Amid the concerns that the U.S. wants to divert investments from Europe with its Inflation Reduction Act, we’re showing that a U.S. firm wants to invest in Germany,” a German government source said.
Frankfurt-listed Wolfspeed shares were 6.5% higher in morning trading. European Commission President Ursula von der Leyen will present plans on Wednesday, seen partly as a response to the Inflation Reduction Act, which will aim to ensure the bloc plays a leading role in clean tech production and reduces its dependence on China.
The measures are expected to include a loosening of EU state aid rules, repurposing of existing EU funds and faster approval for green projects in the bloc.
Volkswagen, Europe’s top carmaker, earlier this month warned that the chip squeeze meant 2023 would remain volatile and challenging, but expected supplies to improve.
Wolfspeed specialises in silicon carbide chips, which have been gaining traction with electric car makers as they can handle high voltages and are more power efficient.
