The European Commission has approved under EU State aid rules a €5bn German measure to support European Semiconductor Manufacturing Company (ESMC) build and operate a microchip manufacturing plant in Dresden.
ESMC, a joint venture between Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon, and NXP, targets growing demand for industrial and automotive applications.
The new large-scale manufacturing facility supported under the measure will deliver high-performance chips, based on 300mm silicon wafers with node sizes covering 28/22nm and 16/12nm, using field-effect transistor (FinFET) technology and allowing the integration of several additional features in one chip.
The produced chips will offer better performance while reducing total power consumption. The plant, which is planned to be operating at full capacity by 2029, is expected to produce 480,000 silicon wafers per year.
The facility will operate as an open foundry, meaning that any customer – including but not limited to the three other shareholders besides TSMC – can place orders for the production of specific chips.
This operating model is important for the wider EU, especially in view of ESMC’s commitments to provide dedicated support to European small and medium enterprises (SMEs) and start-ups, to strengthen their know-how and competences. The facility will also provide special access to its production capacities for SMEs and European universities, further supporting research and knowledge creation within Europe.
Margrethe Vestager, Executive Vice-President in charge of competition policy, said the funding will strengthen semiconductor capacity in Europe. “The measure’s open foundry model will ensure widespread access to power efficient chips, including by smaller companies and start-ups, while limiting any potential distortion of competition.”
The move will strengthen Europe’s security of supply, resilience and digital sovereignty in semiconductor technologies, in line with the objectives set out in the European Chips Act – which came into force last September – and contribute to digital and green transitions.
The semiconductor industry, for years dominated by Asia, is seeing the US, and now Europe, step up their activity.
In July 2022, US Congress passed the CHIPS Act to strengthen its domestic semiconductor manufacturing, design and research, fortify the economy and national security, and reinforce America’s chip supply chains.
