EC Approves €660 Million German State Aid for Chip Investment

The European Commission approved €659 million in German state aid for German subsidiaries to finance four new semiconductor facilities. The EC found that the aid is in line with the EU’s Chips 2.0 Act.

The measures would contribute to strengthening the EU position and autonomy in the semiconductor value chain by supporting the construction of first-of-a-kind facilities, the EC said. Germany will provide direct grants of €353 million, €214 million, €74.4 million and €17.9 million, respectively, to build the four semiconductor facilities.

The biggest sum will be invested in Baesweiler in North Rhine-Westphalia, on a site to manufacture silicon carbide epi-wafers. The EC explained this new type of semiconductor is expected to be used in various sectors including automotive, industrial, telecoms and energy, enabling improvements in the manufacturing process.

All beneficiaries of the investments have agreed to ensure the broader impact of the projects has positive effects on the EU semiconductor value chain, and strengthens collaboration with universities and research institutions. They also pledged to fulfil orders on a priority basis, develop specialised training programmes and share project-related profits with Germany.

The EC explained that an assessment of the plan indicated the measures would promote development of economic activities by creating capacity in Europe, had limited impact on competition and trade in the EU, and had a positive effect on the region’s semiconductor sector. It stated the awards are the 15th to 18th under its Chips Act 2.0, adopted last month, and the original Chips Act. Under the initiatives, it has provided cumulative aid of around €14.2 billion.