The race to secure semiconductor supply in Europe just reached a significant milestone with an institutional seal of approval. The European Commission has approved a public aid of €623 million to support the construction of two chip manufacturing facilities in Germany, one in Dresden and another in Erfurt, aligning with the goals of the European Chips Act and the community’s policy priorities for the 2024-2029 period. The funding will be split between GlobalFoundries (€495 million) and X-FAB (€128 million).
This measure is notable: in an industry where timelines span years and investments reach billions, public backing aims to accelerate projects that, according to Brussels, would not be undertaken in Europe without this push. The Commission has justified the “stimulating effect” of the subsidies and added that the impact on competition and trade within the EU would be limited, while considering the aid necessary to strengthen the resilience of Europe’s semiconductor supply chain.
Dresden: GlobalFoundries’ SPRINT Project and the Entry of 300mm Wafers in a “Dual-Use” Line
The largest aid package is allocated to GlobalFoundries. The project, called SPRINT, aims to expand and adapt its industrial base in Dresden to enable 300mm wafer fabrication capacity, a key format for competitive large-scale production.
Beyond wafer size, what stands out is the industrial purpose: the Commission places these technologies within the framework of the IPCEI Microelectronics & Communication Technologies, with a focus on dual-use applications tailored for highly sensitive sectors like aerospace, defense, and critical infrastructure. The political logic is clear: it’s not just about producing more chips, but about manufacturing them under enhanced security and reliability requirements, using processes conducted entirely within Europe to meet the demands of clients seeking control over the manufacturing cycle and the supply chain.
In parallel, several German media outlets have highlighted that GlobalFoundries’ plan involves large-scale expansion: the company has already announced a €1.1 billion investment to grow in Dresden, aiming to increase capacity and reinforce the plant’s European role.
Erfurt: X-FAB Drives an Open Foundry Focused on MEMS and Advanced Packaging
The second block of European aid supports X-FAB’s Fab4Micro project in Erfurt, conceived as an open foundry. The technological focus differs from GlobalFoundries: this facility will combine existing capabilities—such as microelectronic systems and MEMS—with innovative packaging and integration processes.
The economic message is also different: the sector reports indicate that this “open foundry” aims to serve fabless companies (firms that design chips but do not manufacture them), including startups and SMEs that currently rely heavily on industrial capacity outside Europe. In a market where access to production can become a bottleneck, having a local option is seen as a step toward boosting European innovation without leaving the continent.
Regarding the timeline, X-FAB’s project is set for mid-term operations: commercial production is expected to start by 2029, according to publicly available sector information following the community’s approval.
Why Brussels Is Accelerating: External Dependence, Resilience, and “Crisis Mode”
Although the announcement is framed as a state aid decision, the underlying strategy is clear. Europe aims to reduce its exposure to disruptions in global supply chains—ranging from geopolitical tensions to logistical crises—and simultaneously strengthen industrial capacities in areas where technological autonomy is increasingly crucial. In this context, Brussels asserts that these two facilities will provide “world-class” capabilities currently absent in the EU, helping to reduce dependence on outside foundries.
The sectoral coverage also notes that these projects are conceived not only to meet normal market demand but also to respond to pressure scenarios: priority ordering, supply chain continuity, and alignment with frameworks like the European Chips Act when the logic of “supply security” is activated.
Furthermore, the Commission has introduced an element aimed at addressing a recurring debate: the social return of subsidies. Both companies have agreed to share the potential benefits of the project with Germany if results surpass current expectations, a mechanism designed to limit critiques of “subsidies to multinationals” and to reinforce the narrative of public investment with meaningful reciprocities.
Through these aids, the EU may not solve the entire challenge of microelectronics— which still requires talent, competitive energy, suppliers, and steady demand— but it solidifies a direction: more industrial capacity on European soil, focused on both scale (300mm wafers) and specialized technologies (MEMS and advanced packaging) that support critical sectors, from automotive to AI-related applications.
Frequently Asked Questions
What does it mean that X-FAB will set up an “open foundry” in Erfurt, and who benefits?
It means it will offer manufacturing capacity to third parties, especially European fabless companies, startups, and SMEs that design chips but lack their own fabrication facilities.
Why is the EU funding chip factories with public money instead of leaving it to the market?
The Commission argues there is an “incentive effect”: without aid, these investments wouldn’t happen in Europe. The goal is to boost resilience and reduce dependence on outside production.
What is the impact of manufacturing 300mm wafers at a plant like Dresden’s?
The 300mm format allows for higher-scale production with better industrial efficiency, which is key to competing and supplying strategic sectors.
When will the new X-FAB plant in Erfurt start producing?
Public information following the decision indicates commercial operations are expected to begin around 2029.
Sources: