The European Commission, the European Union’s primary executive arm, has approved Germany’s plan to invest $5.6 billion in the European Semiconductor Manufacturing Company’s effort to build a microchip facility in Dresden.
According to the EC, the large-scale manufacturing plant will produce high-performance chips based on 300 mm silicon wafers that improve performance while reducing total power consumption. The facility will operate as an open foundry, allowing customers to place orders for specific chips.
ESMC is a joint venture between Taiwan Semiconductor Manufacturing Co., Bosch, Infineon and NXP.
Germany notified the commission of its proposal in compliance with EU state aid rules. The EC approved the plan after a review that determined the project would promote economic activity and an “incentive effect,” earning public sector support and impacting the continent’s semiconductor ecosystem.
The approval of the German aid aligns with the European Chips Act, which aims to strengthen the continent’s semiconductor manufacturing capabilities by supporting innovation efforts led by EU member states.