Brussels (The Brussels Morning Newspaper) – The European Commission approved a €5 billion German State aid effort to help ESMC set up a new semiconductor manufacturing structure.
The European Commission has authorised, under EU State aid regulations, a €5 billion German measure to back European Semiconductor Manufacturing Company (‘ESMC’) in the structure and function of a microchip manufacturing plant in Dresden. ESMC is a joint happening between Taiwan Semiconductor Manufacturing Company (‘TSMC’), Bosch, Infineon, and NXP. The measure will support Europe’s security of supply, stability and digital sovereignty in semiconductor technologies, in line with the purposes set out in the European Chips Act Communication.
What Are the Objectives of the New Semiconductor Plant in Dresden?
Germany informed the EU Commission of its intent to support ESMC’s project to construct and operate a new semiconductor production facility in Dresden, Germany. The project seeks to satisfy the demand for automotive and industrial applications.
The new large-scale manufacturing facility funded under the measure will deliver high-performance chips, founded on 300mm silicon wafers with node measures covering 28/22nm and 16/12nm, utilising field-effect transistor (‘FinFET’) technology and letting the integration of several additional components in one chip. The assembled chips will offer better interpretation while at the same time lowering total power consumption. The plant, which is designed to be operating at full capacity by 2029, is anticipated to produce 480,000 silicon wafers per year.
The structure will serve as an open foundry, suggesting that any customer – including but not limited to the three other shareholders besides TSMC – can set orders for the production of specific chips.
How Does ESMC’s Project Align with the European Chips Act?
This working model is important for the wider EU ecosystem, mainly because of ESMC’s commitment to delivering dedicated support to European small and medium enterprises (‘SMEs’) and start-ups, to boost their know-how and competencies. The facility will also deliver special access to its production capabilities for SMEs and European universities, further supporting analysis and knowledge creation within Europe.
Why Is the EU Investing in Germany’s Semiconductor Manufacturing?
The EU Commission evaluated the German measure under EU State aid rules and figured that the measure encourages the development of specific economic activities, by allowing the establishment of a fresh mass-production facility for innovative technologies and chips in Europe.
Further, the Commission found that the facility is first-of-a-kind in Europe, as there presently is no comparable mass-production structure for the specific technology components offered. ESMC will be the first open foundry that will create silicon wafers with 28/22nm and 16/12nm technology nodes, operating FinFET technology with logic, mixed-signal, radio frequency and embedded non-volatile memory technology processes. These distinct technologies differentiate it from other existing capacities and complete the production capacities required by European customers.
Moreover, the Commission concluded that the measure has broad positive effects on the European semiconductor ecosystem and assists in maintaining Europe’s security of supply, in particular by forming an open foundry supplying access for European customers, including SMEs and start-ups.
