The Commission has approved, under EU State aid rules, an Important Project of Common European Interest (‘IPCEI’) to support research, innovation and the first industrial deployment of microelectronics and communication technologies across the value chain.
The project, called “IPCEI ME/CT”, was jointly prepared and notified by fourteen Member States: Austria, Czechia, Finland, France, Germany, Greece, Ireland, Italy, Malta, the Netherlands, Poland, Romania, Slovakia and Spain.
The Member States will provide up to €8.1 billion in public funding, which is expected to unlock additional €13.7 billion in private investments. As part of this IPCEI,56 companies, including small and medium-sized enterprises (‘SMEs’) and start-ups, will undertake 68 projects.
IPCEI ME/CT
The IPCEI ME/CT concerns research and development projects covering microelectronics and communication technologies across the whole value chain from materials and tools to the chip designs and manufacturing processes.
These projects aim at enabling the digital and green transformation by: (i) creating innovative microelectronics and communication solutions, and (ii) developing energy-efficient and resource-saving electronics systems and manufacturing methods. They will contribute to the technological advancement of many sectors, including communications (5G and 6G), autonomous driving, artificial intelligence and quantum computing. They will also support companies active in the energy generation, distribution and use in their green transition.
First novel products may be introduced to the market as early as 2025 and the completion of the overall project is planned for 2032, with timelines varying in function of the project and the companies involved. Around 8.700 direct jobs are expected to be created, and many more indirect ones.
IPCEI ME/CT follows and complements the first IPCEI to support research and innovation in the field of microelectronics, approved by the Commission in December 2018.
The Commission assessment
The Commission assessed the proposed IPCEI under EU State aid rules, more specifically its 2021 Communication on Important Projects of Common European Interest (‘IPCEI Communication’). Where private initiatives supporting breakthrough innovation fail to materialise because of the significant risks such projects entail, the IPCEI rules enable Member States to jointly fill the gap to overcome these important market failures. At the same time, the IPCEI rules ensure that the EU economy at large benefits from the supported investments and limit potential distortions to competition.
The Commission has found that the IPCEI ME/CT fulfils the required conditions set out in its Communication and is in line with State aid rules.
In particular, the Commission concluded that:
- The IPCEI ME/CT directly contributes to achieving several EU objectives of a greener, digital, more secure, resilient and sovereign economy set out in key EU policy initiatives, such as the Europe’s Digital Decade and the European Green Deal.
- All 68 projects part of the IPCEI are highly ambitious, as they aim at developing technologies that go beyond what the market currently offers and will allow major improvements, notably in the areas of sensors, high performance processors, microprocessors including artificial intelligence, actuators and communication means for secure data exchange.
- The IPCEI also involves significant technological and financial risks. Therefore, public support is necessary to provide incentives to companies to carry out the investment.
- Aid to individual companies is limited to what is necessary, proportionate and does not unduly distort competition. In particular, the Commission has verified that the total planned maximum aid amounts are in line with the eligible costs of the projects and their funding gaps. Furthermore, if large projects covered by the IPCEI turn out to be very successful, generating extra net revenues, the companies will return part of the aid received to the respective Member State (claw-back mechanism).
- The results of the project will be widely shared by participating companies benefitting from the public support with the European scientific community and industry beyond the companies and countries that are part of the IPCEI, including through conferences, publications, access to pilot and production facilities or licensing of intellectual property rights. As a result, positive spill-over effects will be generated throughout Europe.
Funding, participants and structure of the IPCEI
The IPCEI involves 68 projects from 56 companies. These direct participants will closely cooperate through more than 180 envisaged cross-border collaborations.
The figure below presents the overall structure of IPCEI ME/CT, including the individual workstreams:
The 68 projects are part of the widerIPCEI ME/CT ecosystem involving over 30 associated participants, including universities, research organisations and companies located in five additional EU Member States (Belgium, Hungary, Latvia, Portugal, and Slovenia) and Norway. Public support to projects handled by research organisation do not require the Commission’s approval, as it does not qualify as aid. The companies, which seek limited aid amounts, can obtain the public support under General Block Exemption Regulation, which therefore does not need to be notified to the Commission for approval. Their innovative projects are not considered part of the IPCEI as such.
The figure below presents the IPCEI ecosystem showing the direct participants and the associated participants:
In addition, there are around 600 indirect partners which are companies or organisations that hold collaboration agreements with one or more direct participants of IPCEI ME/CT and that can therefore benefit from the various dissemination activities.
Several Member States (Austria, Czechia, Finland, France, Germany, Italy, Latvia, Romania, Slovakia and Spain) included their participation in the IPCEI ME/CT in their Recovery and Resilience Plans. These Member States have the possibility to partly fund their projects through the Recovery and Resilience Facility.
More information on the amount of aid to individual participants will be available in the public version of the Commission’s decision, once confidentiality issues have been resolved with Member States and third parties.
Background
The Commission’s approval of this IPCEI is part of the wider Commission efforts to ensure a greener, digital, more secure, resilient, and sovereign European economy.
On 7 December 2020, 22 Member States signed a joint Declaration on a European Initiative on Processors and semiconductor technologies, in which they stated their willingness to cooperate and co-invest in semiconductor technologies by mobilising industrial stakeholders through an alliance, addressing common challenges through various funding mechanisms and setting up a new IPCEI.
In December 2018, the Commission approved, under EU State aid rules, the first IPCEI to support research and innovation in the field of microelectronics with a budget up to €1.75 billion. The project was jointly set-up and notified by France, Germany, Italy and the United Kingdom. This project, which aims at developing innovative microelectronics technologies and components for automotive, Internet of Things and other key applications (such as space, avionics, and security) and their first industrial deployment, originally involved 27 companies and two research organisations. In March 2021, the Commission approved Austrian support in favour of three companies joining the project.
Today’s decision concerns the sixth IPCEI approved under EU State aid rules. It is third IPCEI approved on the basis of the 2021 IPCEI Communication, setting out criteria under which several Member States can support transnational projects of strategic significance for the EU under Article 107(3)(b) of the Treaty on the Functioning of the European Union. The Communication aims at encouraging Member States to support highly innovative projects that make a clear contribution to economic growth, jobs and competitiveness.
The IPCEI Communication complements other State aid rules such as the Climate, Energy and Environment Aid Guidelines, the General Block Exemption Regulation and the Framework for State aid for research and development and innovation, which allow supporting innovative and green projects whilst ensuring that potential competition distortions are limited.
The IPCEI Communication supports investments for research, development and innovation, first industrial deployment and construction of infrastructure on condition that the projects receiving this funding are highly innovative, of European relevance and do not cover mass production or commercial activities. They also require extensive dissemination and spillover commitments of new knowledge throughout the EU, as well as a detailed competition assessment to minimise any undue distortions in the internal market.
On 1 February 2023, the Commission announced in its Communication “A Green Deal Industrial Plan for the Net-Zero Age” that it would revise the General Block Exemption Regulation (GBER) in light of the Green Deal, increasing notification thresholds for support for green investments, in order to further streamline and simplify the roll-out of IPCEIs. On 9 March 2023, the Commission endorsed an amendment to the GBER whereby innovative IPCEI-related projects can receive aid up to €50 million without requiring notification to the Commission. At the same time, these projects are still recognised as part of the ecosystem created by the IPCEI.
In addition as part of its Green Deal Industrial Plan, on 1 February 2023, the Commission announced that it would prepare a Code of Good Practices (“Code”) based on the knowledge, experience and lessons learned on the State aid assessments for previous and on-going IPCEIs, to ensure a more transparent, inclusive, faster and streamlined design and assessment of IPCEI projects. On 17 May 2023, the Commission published the Code on DG COMP’s dedicated IPCEI website. This Code constitutes a manual of good practices addressed to national authorities, the Coordinator Member State selected by the national authorities, companies benefitting from aid based on the IPCEI rules, and the Commission services. In addition, the Commission intends to organise regular technical meetings with Member States to share good practices, in order to further improve the IPCEI processes for all stakeholders and to ensure that all Member States can participate to future IPCEIs.
The non-confidential version of the decision will be made available under the case numbers SA.101202 (Austria), SA.101141 (Czechia), SA.101143 (Finland), SA.101193 (France), SA.101129 (Germany), SA.101210 (Greece), SA.101151 (Ireland), SA.101186 (Italy), SA.101201 (Malta), SA.101171 (the Netherlands), SA.101175 (Poland), SA.101192 (Romania), SA.101200 (Slovakia) and SA.101150 (Spain) in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
Quotes
Microelectronics and communication technologies are the backbone of any modern electronic device from mobile phones to medical equipment. This Important Project of Common European interest is the largest approved so far and the second on microelectronics. Innovation is essential to help Europe economy become greener and more resilient. But innovation can come with risks that the market alone is not ready to take. This is why State aid should be made available to fill such a gap.
This latest IPCEI approved today is yet another demonstration of the EU Chips Act already triggering considerable public and private investment across the European semiconductor value chain: from materials to design, from equipment to advanced packaging. By investing in our innovative companies, we are investing in Europe’s technological and industrial leadership in semiconductors, as well as our security of supply and economic security.
Remarks by EU Commission Executive VP Vestager on an Important Project of Common European Interest in microelectronics and communication technologies
Brussels, 8 June 2023
Today, the Commission has approved a cutting-edge microelectronics and communication technologies project. It is an Important Project of Common European Interest approved under EU State aid rules. We call them IPCEIs.
Microchips are the backbone of innovation and of Europe’s industrial competitiveness in a digital world. The green and digital transitions require new, advanced technological solutions.
And this is why we must increase the Europe’s own chips research, development and production capabilities. We need to be pioneers and develop truly innovative solutions and their first industrial deployment in Europe.
State aid has a key role to play, in particular the Important Projects of Common European Interest. Today’s approval follows the Commission’s approval of a first IPCEI in the microelectronic sector in December 2018. And that one focused on improving energy efficiency, reliability and accuracy of chips.
To give you just a few examples, it enabled a young German company, CorTec, to develop a brain implant connecting human nerve system wirelessly with a computer for therapeutic purposes. It also helped Carl Zeiss develop the advanced optical solutions necessary for the manufacturing of high-end chips with structures as small as 10 nanometres and smaller.
I also had the pleasure to attend the opening ceremony of a modern chips factory in Dresden made by Bosch, which was made possible by this first IPCEI in microelectronics.
IPCEI are complemented by other State aid tools. We approved, directly under the Treaty, French and Italian aid to support STMicroelectronics and GlobalFoundries in the establishment of mass-production first-of-a-kind facilities. These two companies will produce now at larger scale innovative technologies that they developed in the framework of the 2018 IPCEI.
Other instruments support the microelectronics industry. The European Chips Act will further support research, development and innovation. It will help fill the gap from research to production by developing design capacities and pilot lines. It will also streamline procedures, and here in particular permitting.
Coming back to today’s IPCEI. This was jointly prepared and notified by no less than 14 Member States – Austria, Czechia, Finland, France, Germany, Greece, Ireland, Italy, Malta, the Netherlands, Poland, Romania, Slovakia and Spain. That project started over a year ago with the pre-notification by the Member States between December 2021 and March 2022.
These Member States will provide up to 8.1 billion euros in public funding. This is expected to unlock another 13.7 billion euros of private investments. This will bring the total investments in the project to over 21 billion euros. Just to have a bit of relationship with this gigantic numbers. It is four times the size of the budget of the Copernicus programme that is celebrating its 25th birthday today.
As part of this IPCEI, 56 companies across the European Union, including small and medium-sized enterprises and also a few start-ups, will undertake a total of 68 projects. In terms of number of participants, investment and State aid, it is the largest IPCEI so far.
The project will also enable a wider ecosystem, enabling more than 30 associated participants. These include universities, research organisations and company projects across Europe. This wider IPCEI ecosystem brings in Norway and five additional Member States – Belgium, Hungary, Latvia, Portugal, and Slovenia which will grant aid under the General Block Exemption Regulation.
This IPCEI aims at enabling research and development of innovative and resource-efficient technologies and components. They are chips, processors and sensors that can be integrated in a large set of downstream applications and industries.
More specifically, the participants in this project will focus their work on four interconnected workstreams.
The first workstream “Sense” will focus on developing novel sensors able to collect relevant analogue signals from our environment and translate them into digital data. Vigo, a Polish SME, will develop sensors in highly compact integrated circuits, replacing the current complex and large systems.
The second workstream “Think” will work on the “brain” of microelectronic systems, namely processors and memory chips. They will enable the processing and storing of the data gathered in a secure and efficient way. For example, a German Tech Start-Up, is expected to make the data transfer between chips 10 to 100 times faster than what we can do today. The key to this new technology is graphene, a one-atom thin layer of carbon with outstanding electrical and optical qualities.
The third workstream “Act” will focus on the “muscles” of the microelectronic systems. New designs and innovative materials for highly efficient and performant components will be developed for a wide range of applications. For example, Continental Romania will develop a new electronic brake system, moving away from the standard hydraulic system, to smart, electromechanically operated brakes, working independently on each wheel. And alsohe removal of brake fluid is integrated, which is obviously an environmental benefit.
The fourth workstream “Communicate” will work to deliver novel technologies necessary for rapid, secure and reliable communication that has been processed under the “Think” workstream. The Air!5G project by AIRBUS in France, will develop 5G capabilities that will allow to make calls or use data on the phone while on flights. But also 5G capabilities that will ensure connectivity in a critical situation, like earthquakes, where communications lines otherwise can be cut.
The IPCEI should deliver first innovative products to the market already in 2025 and create around 8.700 highly skilled direct jobs and obviously many more indirect ones.
State aid rules for IPCEIs, they allow Member States to pool resources and cooperate across borders. They enable breakthrough innovation and support for infrastructure projects in key sectors and key technologies, where the market would not deliver otherwise. And all of this while generating positive spill-overs for all of European economy, and also for citizens beyond the participating Member States, and preserving fair competition.
We thoroughly assessed the project and we have concluded that the proposed public support is appropriate. It is necessary to give the companies involved in this IPCEI the incentive to engage in truly ambitious research and innovation.
First, this IPCEI will directly contribute to several EU key objectives.
Second, it ensures that taxpayers’ money is wisely spent. So, we checked that projects are truly innovative.
Third, we have ensured that aid is limited to the amount necessary for the project actually to go ahead. And in addition, large beneficiaries will return part of the aid received if their projects turn out to be more profitable than foreseen. We call this a claw-back mechanism.
Fourth, we made sure that the innovative results of the project will be widely shared beyond the companies and the countries that are part of the IPCEI. This will happen through conferences, publications, access to pilot facilities and testing kits or licensing of intellectual property rights.
This is the sixth Important Project of Common European Interest to receive green light under EU State aid rules. IPCEIs are an example of truly ambitious European cooperation. Companies of different sizes, Member States and the Commission, we play each our role, we work together to reach a common objective.
The Commission is actively cooperating with Member States on four other upcoming IPCEIs. They are in the area of health, cloud and hydrogen. And we know that Member States are currently in the process of designing IPCEIs for other key technologies. As always, the Commission stands ready to support their plans, provide guidance and coordinate efforts, while protecting the level playing field in the Single Market.
As part of an effort to simplify the IPCEIs, the amendments of the General Block Exemption Regulation endorsed in March increased the aid intensities and notification thresholds for multi-country research, development and innovation projects such as IPCEI, which leaves more room for Member States to give support directly if conditions are fulfilled.
And just a few weeks ago, after having consulted with Member States, the Commission has published a Code of good practices based on the experiences we have so far. The point is for thisCode to provide transparency about the process at every step. We will be organising regular meetings with Member States to keep sharing good practices, to see how they are used, the sharing of good practices. It aims at further improving the IPCEI process for all stakeholders as well as to ensure that all Member States can participate in future IPCEIs. As you can hear, we have more IPCEIs to come and we hope for Member States to participate in full if it is their priority.
Source – EU Commission