The European Commission has approved a subsidy of 623 million of euros for the construction of two chip manufacturing plants in Germany. Specifically, in the towns of Dresden and Erfurt. This amount will be distributed between GlobalFoundries and X-Fab. 495 million euros will be for the first, and 128 million for the second, to support the construction of one-of-a-kind chip facilities, in line with the objectives of the Communication on the European Chip Law and the European Commission’s Policy Guidelines for 2024-2029.
The GlobalFoundries project, known as Sprint, consists of a semiconductor foundry specialized in manufacturing chips for third parties, and aims to create facilities for the manufacturing of 300 millimeter wafers, based on the adjustment and expansion of the facilities that GlobalFoundries has in Dresden.
The technologies that will be produced at the plant are developed within the framework of the IPCEI Microelectronics & Communication Technologies, although they will be adapted for dual-use purposes. They will be specifically intended for the aerospace, defense and critical infrastructure sectors.
For its implementation, it is necessary to incorporate specific safety and reliability features into the technologies, in addition to requiring a manufacturing process that is carried out entirely in Europe to meet the needs of customers in these sectors. It will be the first time that these technologies are produced at scale in Europe, and the manufacturing process will be the first of its kind in the European Union.
As for the subsidy to X-Fab, it is awarded to the Fab4Micro project for the construction of an open foundry facility at its Erfurt facility. This new plant will focus on combining existing capabilities (microelectronic systems, or MEMS), with innovative packaging and integration processes.
These chip technologies will be used in applications in sectors such as automotive, AI and medicine. The open foundry will also provide manufacturing services to fabless chip design and development companies. These include start-ups and SMEs, which currently rely primarily on open foundries located outside Europe. The new facility will begin operations in 1929 and will offer manufacturing services that currently do not exist in the region.
The Commission has awarded the subsidies since both facilities facilitate the development of economic activities, in addition to pointing out the incentive effect of the subsidies, since the beneficiary companies would not make these investments in Europe without public money.
The measures have a limited impact on competition and trade in the EU, and are considered necessary and appropriate to ensure the resilience of Europe’s semiconductor supply chain. Besides, Both companies have agreed to share the possible benefits with Germany related to the project that exceed current expectations.
