Foreign Investment in Germany Hits All-Time High Record Level

18 Jun, 2024

Foreign Investment in Germany Hits All-Time High Record Level

Foreign companies announced record levels of new investment in Germany last year, despite economic downturns and high energy prices, according to an analysis by Germany Trade and Invest (GTAI). In 2023, commitments for new establishments and expansions totaled 34.8 billion euros ($37.53 billion), exceeding the previous record of 25.3 billion euros in 2022 by more than a third.

Major projects included an investment of 10 billion euros by Taiwanese semiconductor group TSMC for a new plant in Dresden. U.S. chip company Wolfspeed plans to spend 3 billion euros on a plant in Saarland, while Apple is set to expand its European chip design center in Munich with a 1 billion euro investment.

The U.S. pharmaceutical group Eli Lilly is investing around 2.3 billion euros in a new plant in Alzey, Rhineland-Palatinate, and BP is planning to spend up to 6.8 billion euros on two wind farms in the North Sea. Additionally, three data centers in Berlin, Wustermark in Brandenburg, and Hanau in Hesse will exceed the billion-euro mark.

GTAI reported a total of 1,759 projects last year, including new establishments and expansions but excluding takeovers and mergers. This represents a 1% decrease from 2022. In contrast, foreign investment in Europe fell by 7.4%, and by 8.8% in Western Europe, while worldwide foreign investment grew by 2.6%.

A significant portion of the projects are focused on transformation technologies, such as batteries, green energies, and digitalization, which are crucial for Germany’s goal of becoming climate-neutral by 2035. Renewable energy availability remains a key factor in attracting these investments despite high taxes and electricity costs.