After Intel, U.S. chip giant Wolfspeed halts factory construction in Germany

BERLIN, Oct. 24 (Xinhua) — Following Intel’s delay in constructing its chip factory in Germany, U.S. chipmaker Wolfspeed has indefinitely postponed plans to build a semiconductor manufacturing plant in the country, citing slow adoption of electric vehicles as a contributing factor, German media reported on Wednesday.
The announcement was made by Anke Rehlinger, prime minister of Saarland, where the plant is set to be built, according to German public broadcaster ARD.
“The project has not been shelved, but it has been pushed back on the timeline to an indefinite date, largely depending on how the market evolves,” Rehlinger said.
Wolfspeed confirmed the delay, explaining that enhanced production at its U.S. facilities currently allows the company to meet customer demand, given the slower-than-expected growth in the EV market.
“For this reason, we are postponing our plans for the construction of our next factory in Ensdorf, Saarland, at this time,” the chip manufacturer said.
Despite the delay, German news agency DPA said on Thursday that Wolfspeed remains committed to Ensdorf as the future location for a major chip factory. If demand for electric vehicles rises significantly, the company plans to revisit its expansion plans in Europe.
German business daily Handelsblatt noted that the country’s second-largest auto supplier ZF, a key partner in the project, is withdrawing. ZF is in the midst of a crisis and announced earlier plans to cut up to 14,000 jobs.
Wolfspeed and ZF unveiled their plans for the chip factory in early 2023, with Wolfspeed planning to invest approximately 2.7 billion euros (2.9 billion U.S. dollars) and ZF contributing 170 million euros. The project was also expected to receive around 500 million euros in state funding from both the federal government and Saarland.
The construction of the chip factory had already been delayed earlier this year. In June, it was reported that construction would not begin until 2025, although Wolfspeed had initially aimed to start as soon as possible in 2023. ■