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

The European Commission has approved 623 million euros in German state aid to support the construction of two semiconductor manufacturing facilities in Dresden and Erfurt. The funding includes a 495 million euro grant for GlobalFoundries and 128 million euros for X-FAB. Both projects aim to establish first-of-a-kind semiconductor production capacities in the European Union, thereby boosting the European supply chain for the sector. GlobalFoundries' expansion in Dresden, known as the "SPRINT" project, will create new 300mm wafer manufacturing capabilities. The plant will adapt technologies from the IPCEI Microelectronics & Communication Technologies initiative for dual-use applications, including aerospace, defense, and critical infrastructure. According to the Commission, this will be the first large-scale production of such technologies in Europe. X-FAB's "Fab4Micro" project in Erfurt will develop an open foundry combining existing MEMS capabilities with advanced packaging and integration processes. The facility is designed to serve European fabless companies, including startups and small and medium-sized enterprises, which currently rely heavily on foundries located outside Europe. Commercial operations are expected to begin in 2029. "Open foundries are crucial to driving competition and innovation in the European semiconductor sector. These two measures will enable the creation of two new facilities that Europe currently lacks, helping to reduce our dependence on foundries outside the EU and strengthen the resilience of the entire European industry," said Teresa Ribera, Executive Vice-President for a Clean, Fair, and Competitive Transition, in a press statement