Brussels: The EU approved on Tuesday pound 659 million ($752 million) in German state aid for four semiconductor projects, saying the investments will strengthen Europe's technological sovereignty and chipmaking capacity.

According to Anadolu Agency, the European Commission stated that the subsidies comply with EU state aid rules because the facilities are "first-of-a-kind" in Europe and support the objectives of the bloc's Chips Act. European Commission Executive Vice President Teresa Ribera highlighted that this approval marks a significant step in turning the ambitions of the EU Chips Act into action by supporting innovations in semiconductors, thereby bolstering technological sovereignty and Europe's competitiveness.

The aid, distributed as direct grants, will be jointly financed by Germany's federal government and regional authorities. The largest allocation, pound 353 million, is designated for Element 3-5 GmbH to develop a silicon carbide epi-wafer plant in Baesweiler, North Rhine-Westphalia. Vishay Siliconix Itzehoe GmbH is set to receive pound 214 million for a facility in Itzehoe, Schleswig-Holstein, focused on producing next-generation power MOSFETs used in high-voltage power electronics.

Additionally, KLA-Tencor MIE GmbH will obtain pound 74.4 million for a plant in Weilburg, Hesse, dedicated to manufacturing advanced optical metrology equipment for semiconductor process control. KETEK GmbH is also slated to receive pound 17.9 million to establish two production lines in Munich for producing specialized chips for silicon drift detectors and graphene-based radiation entry windows.

The commission emphasized that these projects are expected to expand European manufacturing capacity, promote research cooperation, and enhance resilience in a sector where supply disruptions can lead to significant economic repercussions. Under EU rules, the Commission reviews public subsidies granted by member states to ensure they serve the public interest and maintain fair competition.