With today's German factory report showing an almost 2% decline in new orders the country is going to have to do something or risk becoming an also-ran to China.
And the answer can't just be "Green, Green, More Green" because in many ways that approach just turns wealth into income, comparable in some ways to Bastiat's Broken Window Fallacy or to the Chinese bridge failures, eight in 2011 - 2012 and three more in 2018 - 2019. The last one in Harbin is going to cost $300 million to repair, great for GDP but a net decrease in national wealth. And not so good for the people who died, either.
From Reuters, February 3:
European countries are planning to support the local production of technology hardware with targeted aid that could result in overall investments of up to 50 billion euros ($60 billion), Germany said on Wednesday.
Germany, France and 17 other EU countries agreed to join forces to invest in processors and semiconductor technologies, key to internet-connected devices and data processing in a push to catch up with the United States and Asia.
Europe’s share of the 440 billion-euro global semiconductor market is around 10%, with the EU currently relying on chips made abroad. Such dependence on chips and other products has come under the spotlight during the COVID-19 pandemic.
German Economy Minister Peter Altmaier said during a virtual panel discussion with his French counterpart, Bruno Le Maire, he expected the European project, also known as Important Project of Common European Interest (IPCEI), to trigger overall investments in the chip industry of up to 50 billion euros....
....MUCH MORE
Now what's 50 billion euros, maybe three fabs + equipment?
Taiwan Semi's new plant in Arizona is going to cost $12 billion and they are rumored to be pretty good at this stuff.
Also at Reuters, February 4:
Hit by shortage, Volkswagen demands boost to Europe chip sector
