Brussels, 16 December 2024
The EU Commission has approved, under EU State aid rules, a €81 million Spanish measure to support Diamond Foundry Europe in setting-up a new factory for the production of semiconductor-grade rough synthetic diamonds in Trujillo. The measure will contribute to the EU’s strategic objectives relating to job creation, regional development, and to the green transition of the regional economy.
The Spanish measure
Spain notified the Commission of its plans to support Diamond Foundry Europe in the establishment of a new factory in Trujillo, Extremadura.
The plant will produce rough synthetic diamond wafers using the company’s plasma reactor technology. Synthetic diamonds can be used in the semiconductor industry as an alternative to other resources currently used, such as silicon. The project aims at serving the demand of key sectors, such as 5G networks or electric vehicles.
Under the measure, the aid will take the form of a direct grant of €81 million. The investment is estimated to total around €675 million.
The new factory is designed to be carbon-neutral, powered through entirely renewable energy generated by a solar photovoltaic plant. The plant is expected to have a capacity of approximately 4 to 5 million carats per year. The project will create approximately 300 direct jobs, as well as further indirect jobs.
The new factory will be located in Extremadura, an area eligible for regional aid under Article 107(3)(a) of the Treaty on the Functioning of the EU (‘TFEU’).
The Commission’s assessment
The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(a) of the TFEU, which allows aid to promote the economic development of the most disadvantaged areas of the EU, and the 2022 Regional Aid Guidelines (‘RAG’).
The Commission found that:
- The measure will contribute to job creation, the economic development and to the competitiveness of a disadvantaged area. In particular, the measure will have a positive impact on employment by creating around 300 direct jobs, as well as further indirect jobs in Trujillo, Extremadura.
- The aid has an incentive effect, as the beneficiary would not carry out the project without the public support.
- The measure has a limited impact on competition and trade within the EU. In particular, the aid is necessary and appropriate to set up the new factory of Diamond Foundry Europe, while contributing to the regional development.
- The aid is proportionate since it is limited to the minimum necessary to trigger the investment and will not exceed the maximum allowed aid amount for the project calculated based on the Spanish regional aid map.
On this basis, the Commission approved the Spanish measure under EU State aid rules.
Background
Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe, while ensuring a level playing field between Member States.
In the 2022 RAG, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market and establishes the criteria for identifying the areas that fulfil the conditions of Article 107(3)(a) and (c) of the TFEU (a- and c-areas respectively). On this basis, Member States notified their regional aid maps to the Commission for approval.
On 17 March 2022, the Commission approved Spain’s map for granting regional aid from 1 January 2022 to 31 December 2027, within the framework of the revised RAG. In March 2023, December 2023 and July 2024, the Commission approved amendments to Spain’s regional aid map.
The non-confidential version of the decision will be made available under the case number SA.106799 in the State aid register on the Commission’s 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 Competition Weekly e-News.
Quote(s)
Today’s decision enables Spain to support Diamond Foundry Europe in setting-up its first factory in Europe to produce semiconductor-grade rough synthetic diamonds. This will foster the transition to a decarbonised economy and competitiveness. The measure will also contribute to the economic development of the region, while limiting possible distortions of competition.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition
Source – EU Commission