The EU approved subsidies of 5 billion euros for a chip factory in Germany

ESMC is a joint venture between Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon and NXP.

Support for ESMC, approved under EU state aid rules, will improve European supply, resilience and digital sovereignty in semiconductor technologies. It will also contribute to the digital and green transition, the European Commission announced.

The President of the European Commission, Ursula von der Leyen, said at the ceremony laying the foundation stone for the plant in Dresden that the new factory is a confirmation of Europe as a global powerhouse in innovation, that it strengthens technological resilience and means the creation of 11,000 jobs across Europe.

It is estimated that the construction of the factory will cost a total of ten billion euros.

The new "open type" factory will supply high-performance chips and will be able to order production of specific semiconductors.

Margrethe Vestager, the Commissioner in charge of competition policy said that the German state aid of five billion euros will strengthen semiconductor production capacities in Europe and help the EU in the green and digital transition. It will also create opportunities for the employment of highly qualified workers.

She added that the "open type" factory will provide access to semiconductors to a wide range of customers, including small businesses and startups.

German Chancellor Olaf Scholz attended the ceremony in Dresden and said that semiconductors are key to the industry's survival and the country's climate goals.

Scholz emphasized the importance of increasing chip production in Germany to reduce Europe's dependence on others within the global supply chain.

Von der Leyen also announced in Dresden that in her new mandate as head of the Commission, she will take additional measures to improve the competitiveness of European industry.

As she said, a European competitiveness fund will be established for investments in strategic technologies, including in the field of chips.

Economy Minister Robert Habeck said that the approval of the state aid shows German orientation to keep the pace of the project and quickly complete it.