The Netherlands opposes relaxing state-aid rules to build European fab

Paul van Gerven
Leestijd: 3 minuten

Fearing erosion of the EU’s internal free market, several member states including the Netherlands resist the relaxation of state-aid rules that would allow governments to subsidize chip plants in Europe.

Six EU member states, including the Netherlands, are arguing against the relaxation of state-aid rules that are currently being considered by the European Commission. The amendments, among other things, would allow governments to subsidize semiconductor manufacturing facilities. The group is opposed to this; state funds shouldn’t be used to support “mass production or commercial activities,” according to a published letter.

The proposed policy change, involving the IPCEI instrument originally developed to address market failures, has opened a deep rift not only between member states but also within the Commission. Internal market commissioner Thierry Breton, supported by France and Germany, champions heavy state involvement to bolster Europe’s semiconductor manufacturing ecosystem. “Believing we could be satisfied with the partial control of such a strategic supply chain in the making is naive,” Breton said during a recent visit to the Silicon Saxony region near Dresden.

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