EU approves 623 million euros in German aid for two chip factories

The European Commission has approved 623 million euros in German state aid for the construction of two semiconductor factories in Dresden and Erfurt. The support includes a grant of 495 million euros for GlobalFoundries and 128 million euros for X-FAB. Both projects aim to establish first-of-their-kind semiconductor manufacturing capacity within the EU, thereby strengthening the region's semiconductor supply chain. GlobalFoundries' expansion in Dresden, called the "SPRINT" project, will create new 300 mm wafer manufacturing capacity. The facility will adapt processes from the IPCEI Microelectronics & Communication Technologies initiative for so-called dual use, with applications in aerospace, defense, and critical infrastructure. According to the Commission, this will be the first large-scale production of these technologies in Europe. X-FAB's "Fab4Micro" project in Erfurt will develop an open foundry combining existing MEMS capability with advanced packaging and integration processes. The factory will target European chip companies, including start-ups and small and medium-sized enterprises, which today are largely dependent on contract manufacturing outside Europe. Commercial operation is expected to begin in 2029. "Open foundries are crucial to increasing competition and innovation in Europe's semiconductor sector. These two measures make it possible to create two new facilities that Europe still lacks, reducing our dependence on foundries outside the EU and strengthening the resilience of Europe's entire industry," says Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, in a press release