The European Union has approved 623 million euros in support for German chip manufacturing, with 495 million euros earmarked for GlobalFoundries’ Dresden expansion to produce semiconductors for aerospace, defense, and critical infrastructure.

EU officials say the aid boosts competition, innovation, and resilience in Europe’s semiconductor sector by enabling new facilities and reducing dependence on non-EU foundries.

The approvals are part of a broader strategy to strengthen Europe’s semiconductor supply chain and lessen reliance on external suppliers.

Timelines and operational dates are not detailed in the available information.

Production at the new facilities could begin by 2027, with full capacity reached by the end of 2028, supported by a permissible, state-backed pre-approval building permit.

The Dresden and Erfurt expansions will add about 5,000 square meters of cleanroom and lab space, lifting annual wafer output from roughly 950,000 to 1.1 million units.

Funding for X-Fab supports MEMS integration with new packaging techniques, strengthening European options for customers away from Asian foundries.

The package aims to ensure a level playing field among EU member states and bolster strategic capabilities within the bloc.

Beyond semiconductors, the funding targets high-tech manufacturing for aerospace, defense, AI, automotive, and medical technology.

Both GlobalFoundries and X-FAB commit to prioritizing orders during crises to support Europe’s strategic autonomy.

X-FAB will receive 128 million euros to build a new MEMS-focused plant in Erfurt, with operations starting in 2029.

The commission’s approval signals confidence that these facilities will contribute to Europe’s technological sovereignty.