European Commission permits 'first-of-its-kind' microchip manufacturing plant

The European Commission has approved a €5 billion German measure to help European Semiconductor Manufacturing Company (ESMC) build and operate a 'first-of-its-kind' microchip manufacturing plant in Dresden – planning to produce 480,000 silicon wafers annually when it operates at full capacity by 2029.

packagingeurope.com/, Aug. 21, 2024 – 

The measure has been given the green light under EU State aid rules and is expected to improve Europe's security of supply, resilience, and digital sovereignty – aligning with the objectives of the European Chips Act Communication.

Adopted in February 2022, the Communication intends to protect the security of supply and supply chain resilience in the EU – as well as benefit the wider economy – by investing in new advanced semiconductor production facilities. It falls within the Chips Act package, including the European Chips Act, which entered into force in September 2023.

Under the latter, a predicted policy-driven investment of over €43 billion in the run-up to 2023 will include €11 billion towards the Chips for Europe Initiative, which will develop new pilot lines, including one for 3D heterogeneous systems integration and advanced packaging.

ESMC is a joint venture between Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon, and NXP. Germany has notified the Commission that it plans to support ESMC in building the Dresden facility, which is expected in turn to strengthen Europe's position in semiconductor technologies and aid in the digital and green transitions.

The plant will operate as an open foundry. This means that any customer can place orders to produce specific chips. It is believed that this model will benefit ESMC's commitments to support SMEs and start-ups in Europe.

Additionally, special access to the plant's production capabilities will be provided for SMEs and European universities in a bid to drive research and knowledge creation within the continent.

The facility is set to deliver high-performance chips, based on 300mm silicon wafers with node sizes covering 28/22nm and 16/12nm. Field-efficient transistor (FinFET) technology will be used, and the option to integrate several additional features into one chip will be available. It is anticipated that the resultant chips will offer improved performance and reduce total power consumption.

According to the Commission, the facility is the first of its kind in Europe; it claims that there is "no comparable" open foundry that produces silicon wafers with 28/22nm and 16/12nm technology nodes and uses FinFET technology with logic, mixed-signal, radio frequency, and embedded non-volatile memory technology processes. These technologies are set to complement the product capacities required by European customers.

ESMC has committed to apply for recognition as an Open EU Foundry under the EU Chips Act Regulation which, in part, means it will invest in continual innovations in next-generation semiconductor technologies and the EU talent pipeline.

The new plant in Dresden comes after a €2.9 billion French aid measure to support STMicroelectronics and GlobalFoundries to construct and operate a manufacturing facility for microchips in France in April 2023; and, at the end of May 2024, an Italian measure to help STMicroelectronics found a new integrated SiC manufacturing facility in Italy.

In similar news, the CHIPS for America programme is expected to receive up to $1.6 billion in funding across the R&D areas of equipment, tools, processes, and process integration; power delivery and thermal management; connector technology, including photonics and radio frequency; chiplets ecosystem; and co-design and electronic design automation.

In a bid to unlock prototype development opportunities, the programme is set to award $150 million in federal funding to each research area and leverage private sector investments from industry and academia – and the U.S. Department of Commerce has issued a Notice of Intent opening a competition for new R&D deliveries to secure and drive domestic capacity for semiconductor advanced packaging.

Amkor will also receive up to $400 million in proposed funding under the CHIPS and Science Act in a non-preliminary memorandum of terms with the U.S. Department of Commerce. It is expected to result in the 'largest' outsourced advanced packaging and test facility in America and contribute to start-to-finish chip production on U.S. soil.

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