On Thursday, February 20th, the European Commission announced its approval of a 920 million euro state aid package from Germany to Infineon for the establishment of a new semiconductor manufacturing facility in Dresden. This investment will facilitate Infineon's MEGAFAB-DD project, designed for the production of various chip types.
Chip manufacturers worldwide are heavily investing in new facilities, leveraging financial incentives from the United States and the EU to maintain technological leadership over China. The European Commission has allocated 15 billion euros for semiconductor projects, aiming to enhance security, resilience, and technological independence.
According to the European Commission, this new plant, projected to be fully operational by 2031, will bolster Europe's semiconductor industry by providing flexible production capacity. The facility will specialize in wafer processing, testing, and chip development for industrial, automotive, and consumer applications.
The aid to Infineon will be granted in the form of a direct subsidy to support their 3.5 billion euro investment. In compliance with the agreement with the EU, Infineon will ensure positive impacts on the EU's semiconductor value chain, promote research and development of next-generation chips, and prioritize crisis readiness as outlined in the European Chips Act.