The European Commission has approved Germany’s public funding of €5bn (£4.3bn), which will be used to build and run a high-performance chip manufacturing plant in Dresden.
The aid is assigned to European Semiconductor Manufacturing Company (ESMC), a joint enterprise involving Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon, and NXP. The initiative aims to tackle the enduring demand for automotive and industrial applications.
Operating as an “open foundry”, the plant will facilitate production orders for specific chips from any customer. Competition Commissioner Margrethe Vestager said, “This model will ensure widespread access to energy-efficient chips, including for SMEs and start-ups, while restraining potential competition distortion.”
For some years, Europe and other global regions have been facing significant silicon chip supply challenges, verging on shortages. The few companies capable of manufacturing the most advanced semiconductors are primarily based in Taiwan and South Korea. Additionally, the US-China trade tensions are exacerbating these supply issues.
This authorisation represents the Commission’s fourth approval of its kind. Earlier, the Commission sanctioned a silicon carbide wafer plant in Catania, Italy, a new microchip production facility in France, and a new integrated silicon carbide production plant, also in Italy.
