European Commission approves €5 billion state aid for new microchip plant in Dresden
The €10 billion facility will function as an open foundry, focusing on automotive and industrial chips, thereby strengthening Europe’s resilience against future chip shortages.
The European Commission has approved €5 billion in German state aid to support the construction of a new microchip plant in Dresden by the European Semiconductor Manufacturing Company (ESMC), led by Taiwan’s TSMC. This subsidy marks the largest awarded under the EU Chips Act and is Germany’s first such contribution. The plant, which is expected to cost a total of €10 billion, will operate as an open foundry, allowing any customer, including the joint venture partners Bosch, Infineon, and NXP, to order chip production.
The Dresden facility is set to begin production in 2027. It will focus on producing chips essential for automotive and industrial applications, though slightly behind the cutting-edge technology used in AI chips and smartphones. The plant aims to bolster Europe’s resilience against future chip shortages similar to those experienced during the COVID-19 pandemic. The EU and German officials praised the project, emphasising its strategic importance for European manufacturing.
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