By Christina Kyriasoglou / Bloomberg
28 Oct 2025, 11:25 pm
(Oct 28): GlobalFoundries Inc CEO Tim Breen said that the US-based company’s expansion plans in Germany are aimed at meeting increasing demands from clients, who want assurances that their supply of semiconductors is independent from China and Taiwan.
Customers “need to have non-China, non-Taiwan supply” to reduce risks, Breen said in an interview ahead of the company’s formal unveiling of an expansion of its plant in Dresden, Germany.
GlobalFoundries is a provider of made-to-order chips that perform vital but lower-tech functions such as power management. Requests from major European customers, including clients in the automotive sector, have only ramped up since the chip shortage during the coronavirus crisis a few years ago, Breen said.
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The plans for the site, located in a part of eastern Germany known as Silicon Saxony, have become a political affair with German Chancellor Friedrich Merz expected to attend the unveiling on Tuesday (Oct 28) and meet with executives. The chancellor, who has warned against the loss of European competitiveness, has made chips a key part of his tech agenda. Europe has been facing a decline in its share of global semiconductor production, which is increasingly a matter of national security for the bloc’s governments as ties with the US and China fray.
The Dutch government seized chipmaker Nexperia last month over concerns about its Chinese owner Wingtech. The fallout is threatening a key part of the global supply chain for automotive semiconductors.
“We haven’t cracked the code yet on making supply security work fully in Europe and around the world,” Breen said. “Otherwise there wouldn’t be issues like what you’ve been seeing with Nexperia.”
GlobalFoundries is investing US$1.1 billion (RM4.62 billion) to increase chip production at the Dresden site. In the first phase, expected to be completed in 2028, the plant will add 10% capacity to produce 1.1 million wafers annually. Additional buildouts will depend on demand, Breen said.
The European Union passed the EU Chips Act in 2023 with the goal to control 20% of the market share for advanced chip production globally by 2030. However, the level in 2024 was just 8.1%. With large projects — such as Intel Corp’s plan to build a Germany-based factory for cutting-edge chips — hitting delays or being cancelled, the target seems increasingly unlikely.
Companies are receiving subsidies from the act, though there are complaints that the process is slow or going to the wrong companies. In Germany, a project led by Taiwan Semiconductor Manufacturing Co has picked up subsidies under the EU Chips Act. The Taiwanese market leader is building a factory in Dresden together with European partners. Germany’s Infineon Technologies AG has also received such subsidies for its so-called Smart Power Fab based in Dresden.
GlobalFoundries’ Chairman Tom Caulfield said that awarding market leader TSMC the grant over smaller players “distorts the basis for competition” in an interview with German newspaper Handelsblatt last year.
Breen said GlobalFoundries is still waiting to find out if the Dresden project will be granted subsidies. While it was given an initial provision from the German government to start the buildout, further arrangements haven’t been finalised yet.
“We’re confident that it will go through,” he said. “I think we know this fits the European objectives around security and sovereignty.”
28 Oct 2025, 11:25 pm
(Oct 28): GlobalFoundries Inc CEO Tim Breen said that the US-based company’s expansion plans in Germany are aimed at meeting increasing demands from clients, who want assurances that their supply of semiconductors is independent from China and Taiwan.
Customers “need to have non-China, non-Taiwan supply” to reduce risks, Breen said in an interview ahead of the company’s formal unveiling of an expansion of its plant in Dresden, Germany.
GlobalFoundries is a provider of made-to-order chips that perform vital but lower-tech functions such as power management. Requests from major European customers, including clients in the automotive sector, have only ramped up since the chip shortage during the coronavirus crisis a few years ago, Breen said.
The plans for the site, located in a part of eastern Germany known as Silicon Saxony, have become a political affair with German Chancellor Friedrich Merz expected to attend the unveiling on Tuesday (Oct 28) and meet with executives. The chancellor, who has warned against the loss of European competitiveness, has made chips a key part of his tech agenda. Europe has been facing a decline in its share of global semiconductor production, which is increasingly a matter of national security for the bloc’s governments as ties with the US and China fray.
The Dutch government seized chipmaker Nexperia last month over concerns about its Chinese owner Wingtech. The fallout is threatening a key part of the global supply chain for automotive semiconductors.
“We haven’t cracked the code yet on making supply security work fully in Europe and around the world,” Breen said. “Otherwise there wouldn’t be issues like what you’ve been seeing with Nexperia.”
GlobalFoundries is investing US$1.1 billion (RM4.62 billion) to increase chip production at the Dresden site. In the first phase, expected to be completed in 2028, the plant will add 10% capacity to produce 1.1 million wafers annually. Additional buildouts will depend on demand, Breen said.
The European Union passed the EU Chips Act in 2023 with the goal to control 20% of the market share for advanced chip production globally by 2030. However, the level in 2024 was just 8.1%. With large projects — such as Intel Corp’s plan to build a Germany-based factory for cutting-edge chips — hitting delays or being cancelled, the target seems increasingly unlikely.
Companies are receiving subsidies from the act, though there are complaints that the process is slow or going to the wrong companies. In Germany, a project led by Taiwan Semiconductor Manufacturing Co has picked up subsidies under the EU Chips Act. The Taiwanese market leader is building a factory in Dresden together with European partners. Germany’s Infineon Technologies AG has also received such subsidies for its so-called Smart Power Fab based in Dresden.
GlobalFoundries’ Chairman Tom Caulfield said that awarding market leader TSMC the grant over smaller players “distorts the basis for competition” in an interview with German newspaper Handelsblatt last year.
Breen said GlobalFoundries is still waiting to find out if the Dresden project will be granted subsidies. While it was given an initial provision from the German government to start the buildout, further arrangements haven’t been finalised yet.
“We’re confident that it will go through,” he said. “I think we know this fits the European objectives around security and sovereignty.”