The European Commission has given the green light to Germany’s plan to inject €623m into two cutting-edge semiconductor manufacturing projects, a move aimed at strengthening Europe’s technological resilience and reducing its dependence on global chip suppliers.
The approved funding will support new facilities operated by GlobalFoundries in Dresden and X-FAB in Erfurt, both of which are expected to play central roles in the EU’s long-term semiconductor strategy outlined in the European Chips Act.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, explained the significance of the investment: “Open foundries are vital for boosting competition and innovation in Europe’s semiconductor sector.
“These two measures will allow the creation of two new facilities that Europe does not yet have, helping to reduce our dependence on foundries outside the EU and strengthening the resilience of Europe’s entire industry.
GlobalFoundries to build Europe’s first large-scale dual-use wafer line
A major share of the investment – €495m – has been allocated to GlobalFoundries for its ambitious SPRINT project.
The company, known for producing chips for external clients rather than designing its own, plans to significantly expand its 300-millimetre wafer capacity by upgrading its existing Dresden campus.
What sets the project apart is its focus on technologies originally developed under the Important Projects of Common European Interest (IPCEI) for microelectronics.
These technologies will now be adapted for dual-use applications, meaning they can serve both civilian and defence needs.
This includes specialised chips designed for aerospace, defence systems and critical infrastructure – markets that require stringent security, reliability and fully European-based production.
The Dresden expansion is expected to deliver the first semiconductor manufacturing process of its kind in the EU, marking a major milestone in Europe’s efforts to build a secure, autonomous supply chain for high-performance chips.
X-FAB to establish Europe’s first MEMS-focused open foundry
The Commission also approved €128m in support for X-FAB’s Fab4Micro project in Erfurt. X-FAB plans to construct a new open foundry dedicated to micro-electromechanical systems (MEMS), combined with advanced packaging and integration capabilities.
These technologies are essential in sectors experiencing rapid growth, including automotive innovation, artificial intelligence hardware and medical devices.
Unlike traditional foundries that operate on a closed, proprietary basis, the Erfurt site will be an open foundry, offering manufacturing services to fabless chip companies across Europe.
Many of these smaller firms, including start-ups and SMEs, currently rely on manufacturing partners located outside the EU. X-FAB’s new facility aims to change that dynamic, providing a competitive, Europe-based alternative when commercial operations begin in 2029.
The Commission has described the facility as first-of-a-kind in Europe, due to the unique combination of MEMS capabilities and advanced packaging technologies not previously available within the EU.
Strengthening semiconductor skills, innovation and supply security
Both companies have committed to a series of obligations designed to maximise the impact of the public investment.
They will support innovation pipelines for next-generation semiconductor technologies, expand training initiatives to build Europe’s skilled workforce and maintain priority manufacturing capacity during potential supply crises, as foreseen in the European Chips Act.
GlobalFoundries and X-FAB have also agreed to seek designation as Open EU Foundries, a status that promotes broad access for European industry.
Although this recognition process is separate from the state-aid decision, it aligns closely with the EU’s goal of building a robust, interconnected semiconductor ecosystem.
Together, the two projects mark a significant leap forward for Europe’s semiconductor manufacturing ambitions, reinforcing the bloc’s drive toward greater technological sovereignty.
