Verónica Castro-AllendeThe European Commission has announced €5 billion in funding to support the construction of a cutting-edge microchip manufacturing facility in Dresden, Germany. Led by the European Semiconductor Manufacturing Company (ESMC), a collaboration between Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon, and NXP, this plant aims to enhance Europe’s semiconductor production capacity. Set to produce 480,000 silicon wafers periodically by 2029, the facility will use advanced FinFET technology to deliver high-performance, power-efficient chips. The factory’s open foundry model ensures widespread access to these chips, supporting German SMEs, start-ups, and universities in advancing research and innovation. This investment aligns with the German Chips Act and strengthens Europe’s security of supply, reducing reliance on foreign suppliers while fostering technological independence. By bolstering Europe’s semiconductor sector, the initiative is critical for future advancements in AI, quantum computing, and IoT, and will also support the EU’s Green Deal goals through more energy-efficient technologies. Additionally, this initiative will generate high-tech jobs and foster economic resilience across the region, positioning Europe as a leader in global semiconductor technology and innovation.
The European Commission has announced$ 5 billion in financial support for the construction of a significant microchip factory in Europe.
The funding will aid the European Semiconductor Manufacturing Company , ( ESMC) in constructing and operating a world-leading microchip manufacturing plant in Dresden, Germany.
The ESMC is a collaborative project between Taiwan Semiconductor Manufacturing Company , ( TSMC),  , Bosch,  , Infineon, and , NXP.
In addition to achieving the goals of the German Chips Act, the microchip production facility will be crucial in strengthening Europe’s security of supply, resilience, and modern sovereignty in semiconductor technologies.
Margrethe Vestager, Executive Vice-President in charge of competition policy, commented:” This €5bn European measure will strengthen semiconductor production capacity in Europe, helping us deliver our green and electric transition and creating opportunities for high-skilled employment.
“The measure’s empty foundry model will ensure widespread access to power-efficient chips, including by smaller companies and start-ups, while limiting any potential distortion of competition.”
ESMC overview
The innovative large-scale manufacturing facility will produce high-performance microchips using 300mm silicon wafers with node sizes of 28/22nm and 16/12nm, utilising FinFET technology.
This enables the integration of extra features into a single chip, leading to better performance and less power consumption.
The plant, set to reach full capacity by 2029, is expected to produce 480, 000 silicon wafers periodically.
Operating as an empty foundry, the facility will accept orders from any customer, including the three shareholders, alongside TSMC.
This model is important for the EU’s ecosystem, especially in supporting German SMEs and start-ups.
The facility will also provide SMEs and universities with exclusive access to production capacities, helping to advance research and innovation in Europe.
Why Europe must reinforce semiconductor manufacturing
For a number of reasons, expanding the capabilities of semiconductor manufacturing in Europe is important. First of all, semiconductors are the foundation of contemporary technology, which provide power to everything from cars and business machinery to smartphones and computers.
Europe can reduce its reliance on outside suppliers, especially those from Asia and the US, while strengthening its technological superiority and securing supply chains in a sector crucial for economic stability and national security.
Moreover, bolstering semiconductor capabilities supports Europe’s ambitions in emerging technologies such as artificial intelligence, quantum computing, and the Internet of Things ( IoT ).
These innovations and economic growth are expected to be driven by the development of sophisticated semiconductor production in Europe, which means that the region can take the lead more than the lead in these crucial areas.
The wider German economy is also boosted by investing in semiconductor manufacturing. It creates high-tech jobs, supports research and development, and fosters innovation across different sectors, including mechanical, healthcare, and communications.
However, as Europe aims to achieve its Green Deal goals, advanced semiconductor technologies can contribute to more energy-efficient systems, reducing overall carbon footprints.
In essence, advancing microchip manufacturing is essential to Europe’s potential competitiveness, modern leadership, and economic resilience.
The establishment of the ESMC microchip manufacturing facility is a major step in Europe’s development of modern independence and leadership.
This initiative underscores Europe’s commitment to securing a adaptable, aggressive, and sustainable future in semiconductor technology.
