Germany Invests €659m in Semiconductor Manufacturing Expansion

Boosting Europe’s Semiconductor Industry: €659 Million State Aid Approved by the European Commission

The European Commission has given the green light to €659 million in German State aid to bolster the semiconductor value chain with the establishment of groundbreaking facilities. This move aims to enhance the EU’s position and autonomy in the semiconductor sector and aligns with the goals outlined in the Commission’s Communication on ‘A Chips Act for Europe’ and the 2024-2029 Political Guidelines.

Direct Grants for Semiconductor Facilities in Germany

• €353 million allocated to SME Element 3-5 GmbH for a facility in Baesweiler, North Rhine-Westphalia, focusing on silicon carbide epi-wafers manufacturing.
• €214 million earmarked for Vishay Siliconix Itzehoe GmbH to establish a facility in Itzehoe, Schleswig-Holstein, for the production of N- and P-channel Silicon Power MOSFETs.
• €74.4 million granted to KLA-Tencor MIE GmbH for a facility in Weilburg, Hesse, dedicated to manufacturing advanced optical overlay and film metrology equipment.
• €17.9 million provided to KETEK GmbH for a facility in Munich, Bavaria, specializing in the production of Silicon Drift Detectors (SDDs) and Graphene Radiation Entry Windows (GREW).

All funding for these projects is a joint effort between the federal budget and the respective Länder authorities.

Supporting Innovation and Advancements in Semiconductor Technology

The approved aid will enable the construction of first-of-a-kind facilities, each contributing uniquely to the semiconductor value chain. Element 3-5, Vishay, KLA, and KETEK will introduce innovative technologies and processes, fostering advancements in energy efficiency, manufacturing quality, and overall industry competitiveness.

Commitments and Collaborations

• Ensuring a broader impact on the EU semiconductor value chain.
• Enhancing partnerships with universities and research institutions.
• Prioritizing order fulfillment in case of supply shortages.
• Developing specialized training programs for a skilled workforce.
• Agreeing to share potential project-related profits with Germany.

Commission’s Assessment and Approval

The European Commission’s evaluation under EU State aid rules concluded that the German measures facilitate economic development, encourage innovation, and have a limited impact on competition within the EU. The approved aid is deemed necessary, proportionate, and aligned with the objectives of the European Chips Act, ensuring the resilience and security of Europe’s semiconductor supply chain.

Executive Vice-President Teresa Ribera lauded the approval, emphasizing its significance in advancing Europe’s technological sovereignty and competitiveness in the semiconductor industry.