The European Commission has cleared €288m in German State aid for two new semiconductor supply chain projects aimed at strengthening Europe’s chip manufacturing resilience.
The funding will support new production facilities by Carl Zeiss and Zadient Materials Europe GmbH in Germany.
The largest share, €222m, will go to Zeiss to expand semiconductor equipment manufacturing in Oberkochen, Baden-Württemberg.
A further €66m will support Zadient’s planned ultra-pure silicon carbide (SiC) facility in Bitterfeld, Saxony-Anhalt. Both investments form part of Europe’s wider effort to reduce dependence on foreign suppliers in the semiconductor supply chain.
The Commission said the projects align with the goals of the European Commission under the European Chips Act and the EU’s 2024-2029 political strategy.
Officials expect the projects to improve supply security, increase specialist manufacturing capacity and strengthen Europe’s long-term competitiveness in advanced chip production.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, explained: “Chipmaking requires highly sophisticated production equipment and materials with special characteristics such as high purity.
“The German measures approved strengthen the EU’s position in the semiconductor value chain and enable innovation to underpin Europe’s technological leadership and resilience in this field.”
Zeiss project targets next-generation EUV technology
Germany notified Brussels of Zeiss’s “HNA@SCALE” project, which focuses on the industrialisation of next-generation extreme ultraviolet (EUV) optical columns.
These systems are essential components in EUV lithography machines used to manufacture cutting-edge semiconductors.
The technology is closely tied to the production systems developed by ASML, whose EUV machines are considered critical for producing advanced chips used in artificial intelligence, high-performance computing and autonomous driving systems.
By supporting domestic production capabilities within the semiconductor supply chain, the EU aims to strengthen strategic control over one of the most complex and valuable industrial ecosystems in the world.
The Commission approved the Zeiss funding in the form of a direct grant.
Zadient facility to produce ultra-pure SiC
The second approved project centres on Zadient’s “Sic-Pro” initiative, which will establish what Germany describes as a first-of-its-kind European factory for ultra-pure SiC semiconductor source materials.
SiC plays an increasingly important role in power electronics and next-generation semiconductor applications because of its efficiency and heat resistance.
Demand for the material has grown rapidly across sectors, including electric vehicles, renewable energy systems and industrial electronics.
The plant will use a circular production system that recovers and reuses process gases during manufacturing. This approach could improve material quality while reducing energy consumption and long-term operating costs.
The project is also designed to reinforce Europe’s position in the semiconductor supply chain by reducing reliance on imported raw materials and increasing regional manufacturing capability.
Germany expands semiconductor investment push
The approvals represent the third and fourth projects selected under Germany’s November 2024 funding call for innovative investments in the European semiconductor value chain.
As part of the aid agreements, both Zeiss and Zadient committed to measures intended to deliver wider economic benefits across the EU semiconductor sector.
These include collaborating with universities and research institutions, expanding specialist workforce training programmes and prioritising customer orders during supply shortages.
The companies also agreed to share project-related profits with Germany if returns exceed current expectations.
The latest approvals underline how Europe is accelerating efforts to build a more self-sufficient semiconductor supply chain amid growing geopolitical competition and continuing concerns over global chip security.