The European Commission has approved €288 million in German state aid for two new semiconductor supply chain projects aimed at strengthening the resilience of European chip manufacturing.
The funding will support a new production facility by Carl Zeiss and Zadient Materials Europe GmbH in Germany.
The largest share, 222 million euros, will go to Zeiss to expand semiconductor equipment manufacturing in Oberkochen, Baden-Württemberg.
A further 66 million euros will support Zadient’s planned ultra-high purity silicon carbide (SiC) facility in Bitterfeld, Saxony-Anhalt. Both investments are part of a broader European effort to reduce dependence on foreign suppliers in the semiconductor supply chain.
The Commission said these projects are in line with the Commission’s objectives under the European Chip Act and the EU’s political strategy for 2024-2029.
Officials expect the project to improve security of supply, increase specialized manufacturing capacity and strengthen Europe’s long-term competitiveness in advanced chip production.
Teresa Rivera, Executive Vice President of Clean, Fair and Competitive Transition, explains:
“The approved German measures will strengthen the EU’s position in the semiconductor value chain and enable innovation that supports Europe’s technological leadership and resilience in this area.”
Zeiss project targets next generation EUV technology
Germany has notified Brussels of Zeiss’s “HNA@SCALE” project, which focuses on the industrialization of next-generation extreme ultraviolet (EUV) optical columns.
These systems are essential components of EUV lithography equipment used in advanced semiconductor manufacturing.
This technology is closely related to the production system developed by ASML. ASML’s EUV machines are considered essential for manufacturing advanced chips used in artificial intelligence, high-performance computing, and autonomous driving systems.
By supporting domestic production capacity within the semiconductor supply chain, the EU aims to strengthen its strategic control over one of the world’s most complex and valuable industrial ecosystems.
The committee approved funding in the form of a direct grant from Zeiss.
Zadient facility produces ultra-high purity SiC
The second approved project focuses on Zadient’s “Sic-Pro” initiative, which will see Germany establish what it says is the first European factory for ultra-high purity SiC semiconductor source material.
SiC is playing an increasingly important role in power electronics and next-generation semiconductor applications due to its efficiency and thermal resistance.
Demand for this material is rapidly increasing across sectors such as electric vehicles, renewable energy systems, and industrial electronics.
The factory will introduce a circular production system that collects and reuses process gas during manufacturing. This approach can improve material quality while reducing energy consumption and long-term operating costs.
The project also aims to strengthen Europe’s position in the semiconductor supply chain by reducing dependence on imported raw materials and increasing regional manufacturing capacity.
Germany expands semiconductor investment promotion
The approvals represent the third and fourth projects selected under Germany’s November 2024 funding call for innovative investments in the European semiconductor value chain.
As part of the aid agreement, both Zeiss and Xadient have committed to work on measures aimed at delivering wide-ranging economic benefits across the EU’s semiconductor sector.
These include collaborating with universities and research institutes, expanding specialized talent training programs, and prioritizing customer orders during supply shortages.
The companies also agreed to share project-related profits with Germany if revenues exceed current expectations.
The approval highlights how Europe is accelerating its efforts to build a self-sufficient semiconductor supply chain as geopolitical competition intensifies and global chip safety concerns persist.
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