EU approves Austria’s plan to give Infineon, NXP, and AT&S $172.4 million in R&D funding

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The European Union approved Austria’s proposal to provide the local subsidiaries of Infineon Technologies, NXP Semiconductors, and AT&S with €146.5 million ($172.4 million). The nation is financially supporting those providers as part of an Important Project of Common European Interest (IPCEI) initiative to improve the region’s microchip sector.

The European Commission, the EU’s administrative body, believes the public capital infusion will be followed by €530 million ($623.8 million) in private investments.

The trade bloc recently signaled its semiconductor development by unveiling a 10-year utilization program called “Digital Compass.”

The EU’s IPCEI on Microelectronics

In 2018, the European Commission expanded its IPCEI guidelines to enable member states to support electronic component firms. It stipulates that EU countries can provide funding for companies to expand their manufacturing facilities, design expertise, and technological understanding. It also aimed to make the European supply chain less dependant on foreign entities.

The IPCEI on Microelectronics launched with €1.75 billion ($2.05 billion) in public funding provided by Italy, Germany, France, and Britain. It also involved 27 relevant businesses and two research organizations. The initiative sought to give top innovators the funding needed to create new parts for the automotive, avionics, and IoT sectors.

Last December, Austria requested to both join the project and have Infineon, NXP, and AT&S added to its participants’ list, and Brussels approved the bid in late March. As the three companies are some of the world’s most forward-thinking component makers, their inclusion is a smart move.

Going forward, the trio will use its new funding to pursue advanced chip security, energy efficiency, and packaging technologies.

European Commissioner Margrethe Vestager praised Austria’s contribution to the project, commenting it would bring “significant value” to the program.

Europe’s Evolving Semiconductor Ecosystem

The EU has made several moves that will facilitate the evolution of its regional semiconductor ecosystem in recent months.

Seventeen EU member states pledged to work together to make the trade bloc a global component hub in December 2020. The group declared enhancing its local chip design and manufacturing resources would benefit Europe economically and politically. It singled out launching 5G networks, building state-of-the-art fabs, and other goals as critical objectives for the next decade.

In early March, the European Commission released a formal agenda to position the region at the forefront of the semiconductor sector by 2030.

The body’s Digital Compass initiative intends to make Europe home to 20 percent of the global electronic part output by 2030. It also prioritizes building a large foundry capable of fabricating sub 5nm products to support the area’s digitalization.

In addition, Germany is quickly emerging as a new hotspot for the global semiconductor industry.

The nation financially supported Bosch’s effort to open a €1 billion ($1.2 billion) wafer plant in Dresden this month. Similarly, the country’s support of its local chipmakers helped convince Apple to open a cutting-edge IC design center in Munich. Berlin also expressed a desire to ramp up its national component manufacturing capacity in the wake of the global semiconductor shortage.

The EU and its members are very serious about shaping microchip technology’s evolution in the 21st century. Given its resources and determined posture, its success seems assured.

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