The European Commission said it has approved, under EU State aid rules, a €5 billion German measure to support European Semiconductor Manufacturing Company (ESMC) in the construction and operation of a microchip manufacturing plant in Dresden.
ESMC is a joint venture between Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon and NXP. The Dresden facility is forecast to cost €10 billion in total to build.
“The measure 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 Communication …” said the Commission.
“The project aims at serving the demand for automotive and industrial 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 at the same time 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 ecosystem, especially in view of ESMC’s commitments to provide dedicated support to European small and medium enterprises (‘SMEs’) and start-ups, to strengthen their knowhow 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.”
European Commission executive vice-president in charge of competition policy Margrethe Vestager said: “This €5 billion German measure will strengthen semiconductor production capacity in Europe, helping us deliver our green and digital transition and creating opportunities for high-skilled employment.
“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.”