Globalfoundries Secures EUR495 Million EU Grant to Expand German Semiconductor Facility

Globalfoundries has received authorization for a significant government subsidy totaling EUR495 million, aimed at expanding its semiconductor manufacturing operations in Dresden, Germany. The European Commission approved this funding as part of the European Chips Act initiative, which seeks to enhance Europe's domestic semiconductor production capabilities and reduce reliance on non-European suppliers.

The grant will cover approximately 45 percent of the anticipated EUR1.1 billion cost for the expansion project. Construction activities had already commenced under a special permit allowing Globalfoundries to begin work at its own financial risk while awaiting the final funding decision. The new extension is expected to be fully operational by 2028, with partial production increases possibly coming online as early as 2027.

The planned expansion will add around 5,000 square meters of cleanroom and laboratory space to the Dresden site. As a result, the facility's annual production capacity is forecasted to grow from approximately 950,000 to 1.1 million processed silicon wafers. This will boost the output of advanced microchips, which are essential for a wide range of industries, including automotive, industrial automation, and consumer electronics.

Globalfoundries specializes in the manufacturing of microcontrollers with integrated memory, analog circuits, and high-frequency components. The company's Dresden plant is particularly known for its 22FDX technology, a 22-nanometer-class process built on fully depleted silicon-on-insulator (FD-SOI) substrates. This process allows for the production of extremely compact chips, enabling thousands of units to be fabricated from a single wafer. With an annual capacity exceeding one million wafers, Globalfoundries stands as a key supplier for European and global technology markets.

In addition to Globalfoundries, sensor manufacturer X-Fab has also received a substantial EU grant. X-Fab will be awarded EUR128 million to expand its semiconductor facility in Erfurt, Germany. This expansion focuses on micro-electro-mechanical systems (MEMS) and other sensor technologies using established manufacturing processes. The Erfurt plant's new production lines are scheduled to come online by 2029, introducing advanced packaging techniques that have not previously been available in Europe. These developments aim to offer European companies an alternative to Asian contract chip manufacturers, strengthening the region's semiconductor supply chain.

As a condition for receiving these public funds, both Globalfoundries and X-Fab have committed to prioritizing orders from the European Union during periods of crisis, ensuring that critical industries have access to essential semiconductor components. The companies have also pledged to invest in education and training programs to cultivate the next generation of engineers and technical experts, supporting the long-term growth of Europe's high-technology workforce.

Globalfoundries and X-Fab supply components to a broad range of sectors, including the German automotive industry, which has faced challenges due to global chip shortages in recent years. The EU's funding measures are part of a broader strategy to secure Europe's position in the global semiconductor market and to mitigate future disruptions in critical supply chains.

These investments underscore the EU's commitment to fostering technological sovereignty and resilience by supporting domestic manufacturing and innovation in the semiconductor industry. The expansion projects in Dresden and Erfurt are expected to play a significant role in meeting growing demand for advanced electronic components across Europe.