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(Rephrases paragraph 10 after GTAI corrected quote)
By Rene Wagner
BERLIN (Reuters) -Foreign companies announced record levels of new investment in Germany last year despite the economic downturn and high energy prices, according to an analysis published on Tuesday by the federal development agency Germany Trade and Invest (GTAI).
In 2023, commitments for new establishments and expansions totalled 34.8 billion euros ($37.53 billion), exceeding the previous record level of 25.3 billion euros in 2022 by more than a third. "The level of investment has increased noticeably," Achim Hartig, managing director of GTAI, told Reuters.
THE BIGGEST PROJECTS
Eight projects had a volume in the billions. Number one is the Taiwanese semiconductor group TSMC, which plans to invest 10 billion euros in a new plant in Dresden.
The U.S. chip company Wolfspeed wants to spend 3 billion euros on a plant in Saarland. Apple wants to massively expand its European centre for chip design in Munich, planning to spend 1 billion euros.
In other sectors, the U.S. pharmaceutical group Eli Lilly is spending around 2.3 billion euros on its new plant in Alzey in Rhineland-Palatinate, while the energy group BP is planning to spend as much as 6.8 billion euros on two wind farms in the North Sea.
Three data centres in Berlin, Wustermark in Brandenburg and Hanau in Hesse are also set to exceed the billion euro mark.
MORE MONEY, FEWER PROJECTS A total of 1759 projects were announced last year, according to GTAI, which includes new establishments and expansions but not takeovers and mergers in its statistics. This is a decrease of 1%, or 24 projects, compared to 2022.
In Europe, foreign investment fell by as much as 7.4% and in Western Europe by 8.8%. "We are gaining market share here," said Hartig. Worldwide foreign investment, nevertheless, grew by 2.6%.
A good two thirds of the projects can be assigned to the area of transformation technologies, such as batteries, green energies or digitalisation.
"We need these to make Germany climate-neutral by 2035," said Hartig, adding that the availability of renewable energy is a big plus for attracting such companies despite high taxes and electricity costs.
TOP 3 OF INVESTORS
The U.S. remained the largest foreign investor in Germany last year with 235 projects. However, this is 16% less than in 2022, due to the strong support provided by the multi-billion dollar Inflation Reduction Act (IRA) subsidy programme, said GTAI expert Thomas Bozoyan.
"This has made domestic investment in the U.S. more attractive," Bozoyan said.
Switzerland took second place with 202 projects, closely followed by China. With 200 projects, China achieved its highest figure since 2017, boosted by coronavirus catch-up effects.
($1 = 0.9272 euros)
(Reporting by Maria MartinezWriting by Rene WagnerEditing by Peter Graff)
