EU Commission Approves 659 Million Euros for Four Semiconductor Sites in Germany

What Is to Be Built in Baesweiler

According to the European Commission, a globally unique production facility is to be built in Baesweiler, where particularly high-performance wafers will be manufactured. Wafers are thin slices of semiconductor material and form the basis for microchips. These are used in cars, industrial plants, and many electronic devices, among other things. The funding will be financed jointly by the federal government and the state and is part of a program to expand semiconductor production in Europe. With the approval, the pledged funding for the project in Baesweiler can now be disbursed.

In Itzehoe, special semiconductor switches are to be produced, which are used in cars, among other things. At KETEK in Munich, special chips for industrial sorting and recycling systems are to be created. KLA-Tencor in Weilburg receives 74.4 million euros for measuring devices for quality control in chip production.

The approval by the EU Commission was necessary because state aid in the European Union must generally be examined. This is intended to prevent individual companies or countries from gaining an unfair competitive advantage through high subsidies. By 2030, Europe's share of global semiconductor production is to increase significantly.

Currently, the share is around ten percent, according to the EU Commission. Various member states have already supported projects with around 14 billion euros for this purpose, according to the EU Commission. By promoting innovation in the semiconductor sector, the EU continues to pursue the goal of reducing its dependence on non-European manufacturers, particularly from Asia and the USA, and securing the competitiveness of European industry in the long term.

Strategic Background: Competition Among Chip Regions

In addition to the project in Baesweiler, the EU Commission has approved three further semiconductor facilities in Germany. This means concrete investment is now coming to the sites in North Rhine-Westphalia, Schleswig-Holstein, Hesse, and Bavaria, which is intended to enable the establishment of new production capacities. Observers see the decision as a signal that Brussels wants to drive the expansion of European chip capacities at high speed, also to avoid supply risks in the future such as those experienced during the COVID-19 pandemic.

The sites are strategically distributed across several regions of Germany. While Baesweiler receives by far the largest share and is to supply the basic material for microchips with wafer production, Itzehoe with special components for the automotive industry, Weilburg with measurement and quality control, and Munich with chips for sorting and recycling systems round out the value chain. Together, the four projects are intended to structurally strengthen the European semiconductor market and create new jobs.

The decision from Brussels was made on Monday, as reported by the Deutsche Presse-Agentur (dpa), citing the EU Commission. Even though the exact construction and production start dates have not yet been publicly quantified, the approval of state funding is a central prerequisite for the companies to be able to implement their investments as planned.

Reactions and Outlook

In total, the four now-approved projects amount to 659.3 million euros in direct grants. The EU Commission had already approved several billion-euro semiconductor projects of other member states in recent months, thereby consistently continuing the industrial course of significantly increasing Europe's share of the global semiconductor market by 2030.

The funding decision fits into the context of a political competition for chip production, in which the USA and Asian countries have also launched billion-euro programs. For the affected sites in Germany, the approval means planning certainty and the starting signal for the construction of new high-tech factories.

Overall, the approval from Brussels shows that the EU treats the establishment of its own semiconductor production as a strategic priority. The EU Commission will, according to its own statements, review further projects in the member states to increase the European share of global chip production and thereby secure Europe's technological sovereignty in the long term.