Brussels (Brussels Morning Newspaper) – The European Commission announced it had approved a 920 million euro German state aid to Infineon for the development of a new semiconductor manufacturing facility in Dresden.
The initiative will allow Infineon to finish the MEGAFAB-DD project, which will be able to deliver a wide range of different kinds of chips, the Commission also said.
The funding from the Commission will take the form of a direct grant of approximately 920 million euros to Infineon to reinforce its investment, equivalent to 3.5 billion euros. Infineon has expressed the plant will be the biggest single investment in its history.
How will the Dresden chip plant benefit the EU?
In her remarks, Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, said,
The €920 million German measure approved today supports a cutting-edge megafab in Dresden. This project will support the development of a strong and resilient digital economy in Europe and ensure a secure supply of semiconductors for the industry while limiting any potential distortion of competition.
The Commission further said in a statement,
This new manufacturing plant will bring flexible production capacity to the EU and thereby strengthen Europe’s security of supply, resilience and technological autonomy in semiconductor technologies, in line with the objectives set out in the European Chips Act.
When will Infineon reach full production capacity?
As reported by the Commission, the plant – which will be at full capacity in 2031 – will be a front-end building covering wafer testing, processing and separation, saying that its chips will be utilized in automotive, Industrial and consumer applications.
Infineon has reached an agreement with the EU to ensure the task will bring wider positive results to the EU semiconductor value chain and invest in the research and development of the next generation of chips in Europe, the Commission stated.
It will also assist in crisis preparedness by engaging in implementing priority-rated orders in the event of a supply shortfall in line with the European Chips Act.
