EU approves €288 million German state aid for semiconductor supply chain facilities

The European Commission has approved €288 million in German State aid for two semiconductor supply chain facilities: €222 million for Carl Zeiss to build an EUV optical column facility in Oberkochen, and €66 million for Zadient Materials to build a silicon carbide source material plant in Bitterfeld. Both projects support European Chips Act objectives and are first-of-a-kind in Europe.

The European Commission has approved €288 million in German State aid to support the setting up of two new facilities in the semiconductor supply chain, according to an official announcement. The aid consists of a €222 million direct grant for Carl Zeiss to build a facility for manufacturing semiconductor production equipment in Oberkochen, Baden-Württemberg, and a €66 million direct grant for Zadient Materials Europe to set up a facility for manufacturing semiconductor source materials in Bitterfeld, Saxony-Anhalt. The measures will contribute to strengthening the EU's position and autonomy in the semiconductor value chain, in line with the European Chips Act and the Commission's 2024-2029 Political Guidelines.

Carl Zeiss is a German technology company specialising in optics and optoelectronics. The 'HNA@SCALE' project will introduce and industrialise the next generation of extreme ultraviolet optical columns required for EUV lithography machines produced by ASML, crucial for producing leading-edge chips for high-performance computing and autonomous driving systems. Zadient's 'Sic-Pro' investment project involves a first-of-a-kind factory for ultra-pure silicon carbide to be used as semiconductor source material, featuring a circular system where process gases are recovered and reintroduced in the production cycle, supporting high material quality, energy efficiency, and long-term cost-effectiveness.

This development matters for Europe's semiconductor ecosystem, where both measures facilitate the development of economic activities by creating manufacturing capacity for key components of semiconductor manufacturing equipment and source materials. The Commission found that without public support, the companies would downsize, postpone, or not carry out these investments in Europe. Both beneficiaries are applying for Integrated Production Facilities status under the EU Chips Act Regulation, committing to broader impact including collaborations with start-ups, SMEs, and research institutions, specialised training to increase the pool of qualified workers, and priority order fulfilment in case of supply shortages.

For the semiconductor industry, the measures have limited impact on competition and trade within the EU, are proportionate to the proven funding gap, and have wider positive effects for the European semiconductor ecosystem, strengthening Europe's security of supply.