EU approves $752M German aid for new semiconductor plants

The EU approved on Tuesday €659 million ($752 million) in German state aid for four semiconductor projects, saying the investments will strengthen Europe's technological sovereignty and chipmaking capacity.

The European Commission said the subsidies comply with EU state aid rules because the facilities are "first-of-a-kind" in Europe and support the objectives of the bloc's Chips Act.

"Today's approval of Germany's support for four new projects in the semiconductor value chain shows Europe is turning the ambitions of the EU Chips Act into action," European Commission Executive Vice President Teresa Ribera said.

"By backing innovations in semiconductors, we are strengthening our technological sovereignty and Europe's competitiveness," she added.

The aid will be distributed as direct grants jointly financed by Germany's federal government and regional authorities.

The largest allocation, €353 million, will go to Element 3-5 GmbH for a silicon carbide epi-wafer plant in Baesweiler, North Rhine-Westphalia.

Vishay Siliconix Itzehoe GmbH will receive €214 million for a facility in Itzehoe, Schleswig-Holstein, to produce next-generation power MOSFETs used in high-voltage power electronics.

KLA-Tencor MIE GmbH will receive €74.4 million for a plant in Weilburg, Hesse, to manufacture advanced optical metrology equipment for semiconductor process control.

KETEK GmbH will receive €17.9 million for two production lines in Munich to produce specialized chips for silicon drift detectors and graphene-based radiation entry windows.

The commission said the projects would expand European manufacturing capacity, encourage research cooperation and strengthen resilience in a sector where supply disruptions can have broad economic consequences.

Under EU rules, the Commission reviews public subsidies granted by member states to ensure they serve the public interest and do not unduly distort competition.