Germany's semiconductor industry is cutting its reliance on China and leaning on Japan, South Korea and the US instead — good news for those partners, bad for Chinese suppliers.

• German chip firms now treat China as a high-risk source and are building ties with Japan, South Korea and the US.
• Optics maker Zeiss, which supplies the core lenses for ASML's most advanced chip machines, calls China risky and has expanded in South Korea.
• TSMC is building its first European plant in Dresden with Bosch, Infineon and NXP, a €10 billion project making car and industrial chips, due to start production by end of 2027.
• Japanese firms are following TSMC into Saxony — equipment makers like Tokyo Electron and logistics companies are setting up nearby.
• The EU is discussing "trusted chips" rules to keep Chinese-made semiconductors and materials out of defense and AI infrastructure.

Outlook: Expect more Japanese suppliers to cluster around Dresden as the EU formalizes rules favoring chips from trusted partners.