Berlin Robert Habeck’s Federal Ministry of Economic Affairs (Green Party) did not support chipmaker Nexperia’s factory in Hamburg with state funds as originally planned. The European Commission has approved funding for 31 chip projects in Germany, the ministry announced on Tuesday.
In December 2021, the ministry submitted 32 projects. The missing item now is funding Nexperia. Government sources confirmed this to Handelsblatt – the Ministry of Economy itself has removed Nexperia from the list. Funding in this way never stopped.
Nexperia employs 14,000 people worldwide. Most of its chips are produced in Hamburg, where it employs 1,600 people. Headquartered in the Netherlands. However, the company belongs to Wingtech Technology, a Chinese group with ties to the Chinese government.
The case is a manifestation of the readjustment of the federal government’s China policy, which is being vigorously promoted by Economy Minister Habeck. Handelsblatt first reported the skepticism of the Economy Ministry in the winter of 2022.
According to government circles, the decision against promoting Nexperia was made at the highest levels of the ministry. Most of the ministry’s experts have expressed opposition to the defunding.
But Habaek and those around him think it’s wrong to support a company that ends up being backed by the Chinese. Especially when it comes to key technologies like microchips: the money could complicate the flow of know-how to the People’s Republic of China.
Be wary of military uses of Nexperia chips
The decisive factor was that Nexperia’s chips could also be evaluated for military purposes. The intelligence community would support this assessment.
Nexperia has not yet received a negative decision, according to government officials. The ministry is trying to influence the company to withdraw its application for funding. Nexperia still has the opportunity to appeal the Economy Ministry’s decision. The ministry and the company could not be reached for comment initially.
>> Read here: How the Nexperia case became an issue for the Federal Ministry of Economics
Specifically, it is funded within the framework of the “Important Projects of Common European Interest” (IPCEI for short). In IPCEI, the European Commission and Member States define the sectors of the “European common interest” to be promoted. For this industry, in this case microelectronics, the legal framework for state aid will be relaxed.
Germany has approved 31 funding projects totaling 4 billion euros. “In this way, we can increase the resilience of Europe as a whole in this important area and secure added value and jobs,” Habeck explained in Berlin on Thursday.
Supported German companies are speculated to make additional private investments in the tens of billions of dollars in research and development, production facilities and construction. At the same time, the national-level projects will directly create more than 4,000 jobs.
Funded companies will thus include Infineon, which has locations in Bavaria, Saxony and North Rhine-Westphalia, and Baden-Württemberg and Dresden. Location Bosch. Harbeck had no comment on Nexperia.
Nexperia is the embodiment of the struggle for global chip supremacy
The money was supposed to help the company develop energy-efficient chips for its Hamburg-Lokstedt factory. They are designed to extend the range of electric vehicles and shrink the size of electronics chargers. The project was planned together with several partners, including an institute of the Fraunhofer Society.
But after Nexperia was finally placed on the provisional funding list in December 2021, the federal government began launching new courses in China. Especially when it comes to strategic goods such as chips, Berlin is trying to resist Chinese influence.
>> Read here: How Habeck’s doubts about Nexperia grew
The People’s Republic of China, on the other hand, is trying to take over the state-orchestrated global semiconductor market. Berlin fears that China could use the leverage as blackmail to prevent Western sanctions from being imposed should Taiwan be attacked.
At the same time, however, the Nexperia case has sparked debate over whether Germany’s new China policy is paying too much attention to the dividing line.
Sharp criticism of Habeck from SPD and FDP
Even in the federal government, not everyone supports Habaek’s line. In Nexperia’s case, the SPD pushed Habeck’s decision again. Bernd Westphal, the SPD’s economic policy spokesman, told Handelsblatt: “The Federal Ministry of Economic Affairs cannot simply say to every contact with China: ‘We will stop all the machines there.'” The behavior of the Federal Ministry of Economic Affairs is “incomprehensible”.
Semiconductors are of great strategic importance, especially for the German automotive industry.
(Photo: Image Image)
According to Handelsblatt, the SPD-led Chancellery is also involved in the Nexperia case. According to government sources, local people are also skeptical of Habaek’s request. However, decision-making power for funding applications rests entirely with the Ministry of Economy. Furthermore, the Prime Minister’s Office considered the Nexperia case to be tolerable.
So far, Habaek knows the most about another coalition partner at his side when it comes to China policy. But after Nexperia’s decision, criticism also came from the Liberal Democrats.
Their economic policy spokesman, Reinhard Houben, asked the federal government to put its security and China strategy first. “Otherwise, like Nexperia is now, we have individual decisions that don’t follow the overall concept.”
>> Read here: Go straight to the federal government’s national security strategy
On the other hand, Habaek has the support of the opposition. “I think the decision was the right one,” Julia Klöckner, the CDU/CSU’s economic policy spokeswoman, told Handelsblatt. “We all know how the Chinese government handles data, copyright and competition. We shouldn’t be pushing this with German taxes.”
Allegations against Nexperia: State influence from China
Nexperia belongs to the Chinese group Wingtech Technology. Last time sales were $2.1 billion, according to the company. According to an analysis by Datenna, a Dutch data analysis company, as of 2021, nearly 30% of Wingtech’s shares are owned by the state or state-related investors. The relationship between shareholders also involves the “State-owned Assets Supervision and Administration Commission of the State Council.” The group reports directly to China’s State Council.
>> Read here: German companies supply less and less to China
Nexperia has defended itself against allegations of government interference. Co-owners mentioned are passive shareholders. Wingtech and Anshi will not be affected in any way.
Habaek, on the other hand, isn’t the only one who is skeptical. In mid-November, the British government subsequently banned Nexperia from acquiring the country’s largest chip factory.
more: Chipmaker Nexperia complains to feds: ‘You want to actively discriminate against us?’