Updated: Feb 24, 2021
High electricity cost drives German high-tech industry to Asia
By Julian Wettengel for Handelsblatt / Dlf and the GWPF
Siltronic, one of the world’s leading chip makers, is moving Germany’s top high-tech company to Asia.
Siltronic boss Christoph von Plotho blames Germany’s high energy costs for the decision: “The high electricity price makes the location unattractive,” he said in an interview with the Handelsblatt. His company pays “less than half the electricity price” in Singapore.
The main cost driver in Germany is the green energy levy under the Renewable Energy Sources Act (EEG) which has cost energy consumers more than 30 billion euros last year.
Germany’s largest semiconductor producer Infineon told Handelsblatt that insecure power supply was also a major factor in reconsidering industrial production in Germany and Europe.
Several chip and semiconductor manufacturers have criticised high taxes and levies on electricity as a disadvantage for Germany as an industry location in global competition, reports business daily Handelsblatt. “The high electricity price makes the location unattractive,” Christoph von Plotho, head of chip supplier Siltronic, told Handelsblatt. Another main reason were high personnel costs in Germany.
At the same time, a spokesperson of Germany’s largest semiconductor producer Infineon told Handelsblatt that a secure power supply without fluctuations was also a major factor in keeping production in Germany and Europe.
The comments showed that the issue of high power costs extended beyond the traditional industry companies like chemical factories, to high tech sectors, writes Handelsblatt.
The reason for high power prices are taxes and levies on electricity, such as the renewables levy to finance the expansion of wind and solar energy. Many companies are partly or fully exempt from certain levies. In addition, the government has started to use state budget funds, such as revenues from the new CO2 price for transport and heating fuels, to help cap the levy and it plans to further decrease it over coming years.
Cartoon shows possible effect on jobs to be lost in the EU if German green deal followed