Brussels: The European Commission has approved €920 million in state aid from Germany to support Infineon in constructing a new semiconductor manufacturing facility in Dresden.
The funding will enable Infineon to complete its MEGAFAB-DD project, a cutting-edge semiconductor plant capable of producing a diverse range of chips, the Commission said in a statement.
Strengthening Europe’s Semiconductor Industry
Global chipmakers are investing billions in new fabrication plants, leveraging generous subsidies from both the United States and the European Union to maintain a technological edge over China in semiconductor development. As part of its semiconductor strategy, the European Commission has committed €15 billion in public and private funding for chip-related projects by 2030.
“This new manufacturing plant will bring flexible production capacity to the EU and thereby strengthen Europe’s security of supply, resilience, and technological autonomy in semiconductor technologies, in line with the objectives set out in the European Chips Act,” the Commission stated.
The Role of the Dresden Plant
The plant, expected to reach full operational capacity by 2031, will serve as a front-end facility focusing on wafer processing, testing, and separation. The chips produced at the site will be used in industrial, automotive, and consumer applications, boosting Europe’s domestic supply of critical semiconductors.
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Germany’s €920 million direct grant to Infineon is part of a €3.5 billion total investment in the project, making it the largest single investment in Infineon’s history.
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EU Collaboration and Future Commitments
Infineon has pledged to align the project with EU semiconductor supply chain goals, investing in research and development for next-generation chips in Europe. Additionally, the company has committed to enhancing crisis preparedness by prioritizing essential orders during supply shortages, in accordance with the European Chips Act.
