EU backs German chip fabs with €623m State aid
The European Commission has cleared €623 million in German State aid to support two new semiconductor manufacturing projects in Germany, marking another concrete step in Europe’s push for chip sovereignty. Specifically, the funding will support new, first-of-a-kind fabs operated by GlobalFoundries in Dresden and X-FAB in Erfurt.
For eeNews Europe readers, this decision matters because it directly affects Europe’s future access to advanced manufacturing capacity, especially for automotive, industrial, aerospace and AI applications. It also shows where public money is flowing under the European Chips Act and which technologies policymakers consider strategically critical.
Two fabs, two different technology focuses
The largest share of the aid, €495 million, will go to GlobalFoundries to support its “SPRINT” project in Dresden. The US-based pure-play foundry plans to expand and adapt its existing site to add new 300mm wafer manufacturing capacity.
The technologies produced there were originally developed under the IPCEI on Microelectronics and Communication Technologies, but they will now be adapted for dual-use markets, including aerospace, defence and critical infrastructure. This means adding specific security and reliability features and ensuring the entire manufacturing process takes place in Europe. According to the Commission, Europe will manufacture these technologies at scale for the first time.
X-FAB will receive €128 million for its “Fab4Micro” project, which involves building a new open foundry facility at its Erfurt site. The fab will combine X-FAB’s MEMS expertise with advanced packaging and integration processes, targeting applications in automotive, AI and medical electronics. Importantly for the European ecosystem, the facility will offer open foundry services to fabless companies, including start-ups and SMEs that currently depend largely on non-European foundries. Commercial operations are expected to begin in 2029.
Conditions tied to the Chips Act
Both companies have agreed to a number of conditions linked to the aid. These include continuing innovation work, supporting next-generation technologies, prioritising EU orders in the event of a supply crisis, and investing in skills and training to grow the local talent pool.
GlobalFoundries and X-FAB have also committed to applying for recognition as Open EU Foundries under the European Chips Act, a status that comes with additional obligations but also reinforces their strategic role in Europe’s supply chain.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, said: “Open foundries are vital for boosting competition and innovation in Europe’s semiconductor sector. These two measures will allow the creation of two new facilities that Europe does not yet have, helping to reduce our dependence on foundries outside the EU and strengthening the resilience of Europe’s entire industry.”
Part of a bigger funding wave
The Commission approved the measures under Article 107(3)(c) TFEU, concluding that the aid is necessary, proportionate and limited to closing a proven funding gap. These decisions are the tenth and eleventh approvals under the Chips Act framework, bringing total approved semiconductor manufacturing aid across the EU to around €13.2 billion so far.
Finally, the national call launched in late 2024 selected the two German projects among its first choices, showing how quickly the Chips Act is turning into concrete fab investments across Europe.
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