EU backs German investment of €659 million in semiconductor plants

The European Commission on Tuesday gave approval for Germany to provide €659 million ($750 million) in state aid to support the establishment of four semiconductor facilities.

"By backing innovations in semiconductors, we are strengthening our technological sovereignty and Europe's competitiveness," Teresa Ribera, the relevant commissioner said.

"The measures will contribute to strengthening the EU's position and autonomy in the semiconductor value chain," the commission said from Brussels.

According to the commission, Germany will provide the following direct grants: €353 million for a silicon carbide facility in Baesweiler in North Rhine-Westphalia, €214 million for Silicon Power MOSFETs in Itzehoe in Schleswig-Holstein, €74 million for optical and film metrology equipment in Weilburg in Hesse and €18 million for two highly specialized chip facilities in Munich.

The projects are to be funded in coordination with Germany's federal budget and the state-level authorities. All involved have committed to secure positive effects on the semiconductor value chain in the EU and to work with universities and research institutions.

The bloc aims to boost semiconductor manufacturing to a 20% global share by 2030 from around 10% currently. Different member states have to date supported projects with €14 billion, according to the commission.

Providing state subsidies to companies is subject to strict rules within the EU to prevent powerful economies like Germany's from dominating market sectors at the expense of smaller economies.