ANNOUNCEMENT 18 Dec 2018

On 30 November 2018, France, Germany, Italy and the United Kingdom jointly notified the European Commission of support of a microelectronics research and innovation project. The European Commission approved the project on 18 December 2018.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

SA.46578 IPCEI on Microelectronics - Germany: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46578
SA.46705 IPCEI on Microelectronics - France: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46705
SA.46595 IPCEI on Microelectronics - Italy: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46595
SA.46590 IPCEI on Microelectronics - UK: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46590
European Commission, press release of 18 December 2018, State aid: Commission approves plan by France, Germany, Italy and the UK to give €1.75 billion public support to joint research and innovation project in microelectronics: http://europa.eu/rapid/press-release_IP-18-6862_en.htm
European Commission, press release of 13 June 2014, State aid: Commission adopts new rules to support important projects of common European interest: http://europa.eu/rapid/press-release_IP-14-673_en.htm
Official Journal of the European Union, No. C 188/4 of 20 June 2014, COMMUNICATION FROM THE COMMISSION, Criteria for the analysis of the compatibility with the internal market of State aid to promote the execution of important projects of common European interest, Notice number 2014/C 188/02: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2014.188.01.0004.01.ENG
Letter to the Member State - authentic language, Published on 23.12.2019, Important Project of Common European Interest (IPCEI) Microelectronics: https://ec.europa.eu/competition/state_aid/cases1/201952/277367_2120330_254_2.pdf

Inception date: 18 Dec 2018 | Removal date: open ended

Financial grant

On 18 December 2018, the European Commission approved a microelectronics research and innovation project jointly notified by France, Germany, Italy and the United Kingdom. The countries will respectively support the project with EUR 355 million in direct grants or loans/repayable advances (France), EUR 820 million in direct grants (Germany), EUR 524 million in direct grants (Italy) and EUR 48 million in direct grants and repayable advances/interest rate subsidy loans (the United Kingdom). The project support has a total value of EUR 1.75 billion (approx. USD 2 billion). The project is approved under the "Important Project of Common European Interest" (IPCEI) state aid rules.

The purpose of the microelectronics project is to promote research and development of certain innovation technologies and components such as integrated circuits, sensors and chips. The project will be carried out by 29 direct participants from the four countries under five interlinked technology areas. These areas are power semiconductors, energy efficiency in chips, advanced optical equipment, smart sensors and certain other component materials. According to the EU Commission, the participants will, under these technology areas, be involved in 40 interlinked sub-projects consisting of over 100 partnerships. For further details about the direct beneficiaries, please see the press release issued on 18 December 2018.

Under the IPCEI state aid rules, the EU Commission's assessment of the notified financial support noted, among others, that: "investment in research and innovation in microelectronics at this scale is a major transnational innovation project. It carries a considerable element of risk, and therefore public support is appropriate and necessary to incentivise companies to carry out these ambitious research, development and innovation activities. Microelectronics are considered by the Commission as a Key Enabling Technology, which are technologies that have applications in multiple industries and will help tackle societal challenges;"

Following the approval of the state aid granted for the project on 18 December 2018, the Commissioner of Digital Economy and Society Mariya Gabriel stated in a press release: "Every connected device, every modern machine, all our digital services depend on microelectronic components that become smaller and faster with time. If we don't want to depend on others for such essential technology, for example for security or performance reasons, we have to be able to design and produce them ourselves. Today's decision is a result of enhanced cooperation and shared European vision."

The financial support is granted until 31 December 2020 whilst the project is expected to be completed by 2024.

IPCEI state aid rules

The IPCEI state aid rules were adopted on 20 June 2014 by the Communication from the Commission notice number 2014/C 188/02. In this context, the Commission noted in a press release that the Communication is: "aimed at encouraging Member States to channel their public spending to large projects that make a clear contribution to economic growth, jobs and the competitiveness of Europe. Where private initiatives fail to materialise because of the significant risks and the transnational cooperation such projects entail, Member States may fill the funding gap to overcome such market failures and boost the realisation of projects that otherwise would not have taken off."

The new state aid rules allow member states to support IPCEI projects in any sector compared to before where projects had to have a focus on either environment or research. Support may be granted in the form of financial grants, loans, guarantees or repayable advances for certain eligible costs. 

In this context, the Commissioner for Competition Joaquín Almunia stated: "The rules on support for important projects of common interest give Member States a tool to address market failures in financing large transnational projects of a strategic importance."

The Communication is in force from 1 July 2014 to 31 December 2020.

Inception date: 18 Dec 2018 | Removal date: open ended

State loan

On 18 December 2018, the European Commission approved a microelectronics research and innovation project jointly notified by France, Germany, Italy and the United Kingdom. Under the project, France and the United Kingdom will respectively provide EUR 355 million and EUR 48 million in repayable advances/interest rate subsidy loans or financial grants (see related intervention). The project support from both countries has a total value of EUR 403 million (approx. USD 457.9 million). The project is approved under the "Important Project of Common European Interest" (IPCEI) state aid rules.

The purpose of the microelectronics project is to promote research and development of certain innovation technologies and components such as integrated circuits, sensors and chips. For further details about the project, please see related intervention. The financial support is granted until 31 December 2020 whilst the project is expected to be completed by 2024.