The European Commission approved €659m of German state aid on 14 July for four first-of-a-kind semiconductor plants under the European Chips Act, the EU's 2023 framework for subsidising domestic chip production.1 The money splits four ways: Element 3-5 takes €353m for silicon-carbide (SiC) epitaxial wafers in North Rhine-Westphalia; Vishay takes €214m for power metal-oxide-semiconductor field-effect transistors (MOSFETs) in Schleswig-Holstein; KLA-Tencor's metrology arm takes €74.4m for chip quality-control measurement equipment in Hesse; and KETEK takes €17.9m for specialised industrial chips in Bavaria.
These are projects 15 to 18 under the Chips Act, taking cumulative approved support across member states to roughly €14.2bn. Every one sits at the power, analog and metrology layer where Europe already holds ground, not at the leading-edge logic layer where it does not. Silicon carbide and power MOSFETs handle high-voltage switching in electric vehicles and grid hardware, a tier of the value chain well away from the sub-7-nanometre logic that runs AI and smartphones.
None of the four plants is in Dresden, keeping this tranche distinct from Infineon's €5bn Smart Power Fab that opened there on 2 July. European fabs have already shown they can run a sovereign flow end to end at this tier, as GlobalFoundries and Qualinx did at Dresden last month.
Element 3-5's silicon-carbide wafers and Vishay's power transistors add capacity Europe can use. They do not move the number the Commission most wants moved, which its own Digital Decade scorecard put at 9% of global chip output against a 20% target.
