The Netherlands receives the long-awaited blessing from Brussels to invest money in five innovation projects for micro- and nano-electronics. These are IPCEI applications (Important Project of Common European Interest) that were submitted more than a year ago.
The projects that receive support come from, among others, Nearfield Instruments, ASML and chip manufacturer NXP. The latter company focuses on new radar chips and technology for 6G, the mobile network technology that must follow the current 5G standard sometime in the next decade.
It is not yet clear how exactly the 230 million euros for the Dutch IPCEI will be distributed. The Ministry of Economic Affairs expects to give a definite answer on this within a few weeks. Smart Photonics, which develops photonic chips at the Eindhoven High Tech Campus, withdrew its proposal. The application from Eindhoven was assigned the lowest priority on the Dutch IPCEI ranking. As a result, there was too little money left in relation to the administrative burden. Smart Photonics also receives 75 million euros in support from the National Growth Fund.
ASML has submitted plans for a project in which partner companies from abroad are also participating. It would be research that the chip machine maker from Veldhoven does not want to carry out on its own without government support. ASML itself will spend 3.2 billion euros on research and development this year.
State aid is prohibited in the European Union to prevent competition between member states. But there is an exception for strategic investments in microelectronics. The Dutch plans are part of a collection of 68 European IPCEI projects. Together, this concerns 8.1 billion euros in subsidies that the member states are allowed to distribute. According to Thierry Breton, European Commissioner for the domestic market, that amount will be supplemented by more than 13 billion in investments from private parties.
Another chip giant in Germany
The EU is also close to final signature on the EU Chips Act, a €43 billion stimulus program. This money also largely comes from the Member States themselves. The aim is to bring a larger share of chip production to Europe, so that companies are less dependent on chip factories in Asia, especially market leader TSMC.
Intel plans to build a large factory near the German city of Magdeburg. The estimated costs have already risen from 17 to 27 billion euros. As a result, the subsidy that Intel would receive, 6.8 billion euros, is much too low, according to the American chipmaker.
Also read this report about TSMC: Why the whole world counts on chips from Taiwan.
Germany will most likely get another chip giant. The Taiwanese chip manufacturer TSMC, the largest chip manufacturer in the world, confirmed this week during the shareholders’ meeting that there are far-reaching talks about a factory near Dresden. According to TSMC CEO Mark Liu, it is now about filling in the details, such as the amount of the subsidy. TSMC is targeting a joint venture with companies such as suppliers to the automotive industry, such as NXP, Infineon and Robert Bosch. According to the Bloomberg news agency, this involves a total investment of 7 to 10 billion euros. NXP refrains from commenting on the German expansions, but has already increased investments in the Nijmegen factory.
While Intel concentrates on the production of the most advanced processors in Magdeburg, TSMC wants to supply common chip technology in Europe, which is especially needed in the automotive sector. Until last year, the car industry suffered greatly from the chip shortage that arose during the corona pandemic. To prevent new setbacks, car manufacturers want more control over their logistics chain, for example by transferring production to Europe.
Not only Germany is building chip factories: this week, the French Finance Minister Bruno Le Maire announced that he would provide a 2.9 billion euro subsidy to a new factory of ST Microelectronics and GlobalFoundries. It is being built near Grenoble and is estimated to cost 7.5 billion euros.