Analytics, Education and Science, EU – Baltic States, Innovations, Modern EU, Technology

Four EU states (France, Germany, Italy and the UK) decided to provide in the coming five years about €1.75 bn for research and innovation in microelectronics; this funding is expected to unlock an additional €6 bn in private investment.

At the end of November 2018, France, Germany, Italy and the UK jointly notified to the Commission of their intentions to activate and support research and innovation in microelectronics as a so-called “important project of common European interest, IPCEI. Microelectronic devices are usually seen as small electronic components made of semiconductor materials such as silicon. The basic microelectronic components, commonly known as chips and sensors, can be found in almost all electronic devices.

It is expected that the integrated research and innovation project will involve about 30 direct participants situated in both inside and outside the EU. They are mostly industrial actors but also two research organisations, carrying out 40 closely interlinked sub-projects. These direct participants will work in collaboration with a large number of partners, such as other research organisations or SMEs, including other EU states besides the mentioned four.

Short history

In June 2014 the Commission adopted a Communication on Important Projects of Common European Interest, IPCEI setting out criteria under which the EU states can support transnational projects of strategic significance for Europe in line with the TFEU art 107(3,b). This framework aims to encourage the states to support projects that make a clear contribution to economic growth, jobs and competitiveness in Europe.  

On projects of common EU interests in:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2014.188.01.0004.01.ENG; the Communication is valid until December 2020.

The IPCEI framework complements state aid rules such as the “General Block Exemption Regulation and the Research, Development and Innovation Framework, GBER” (from 2014), which allows supporting innovative projects whilst ensuring that potential competition distortions are limited. See press release: http://europa.eu/rapid/press-release_IP-14-586_en.htm

The EU state aid scoreboard shows that more than 95% of new research/development/innovation (R&D&I) measures granted under the GBER could be disbursed quicker. Latest Commission’s data on total spending for R&D&I under the GBER-2014 continued to increase reaching about €5.7 bn in the EU-28 states.

The IPCEI rules support states’ financing for R&D&I in industrial deployment on condition that the projects receiving such funding are highly innovative and do not cover mass production or commercial activities. They also require extensive dissemination and spillover commitments of new knowledge throughout the EU and a detailed competition assessment to minimise any undue distortions in the internal market.

In order to qualify for support under the IPCEI Communication, a project must: (i) contribute to strategic EU objectives, (ii) involve several EU member states, (iii) involve private financing by the beneficiaries, (iv) generate positive spillover effects across the EU that limit potential distortions to competition, and (v) be highly ambitious in terms of research and innovation.

In assessment of the microelectronics IPCEI, the Commission notes 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.
• the results of the research project will be disseminated by participating companies benefiting from the public support. In this context, an annual conference on the project will be organised, and interested parties will be informed in a timely manner of the technological innovation and the new knowledge generated in this project via a dedicated website. Furthermore, companies will host a series of technical events on their respective sub-projects; and
• a governance structure composed of representatives from the participating states, businesses and the Commission will supervise the project and monitor in particular the progress of the individual participants and their partners as well as the sharing of research innovation results beyond the project participants.

Microelectronics’ importance

The importance of microelectronics in modern human activities is huge: these devises can be found almost in all electronics such as phones, computers, washing machines and the cars. The Commissioner in charge of the EU’s competition policy, announced at the end of December 2018 a creation of a special EU state aid program with the rules which would help the states to promote risky and groundbreaking research and innovative solutions while ensuring that the incurred benefits would be shared widely and did not distort the level playing field in the EU. Commissioner for the EU digital economy and society underlined that almost all digital services in Europe depend on microelectronic components that have already become smaller and faster. In order not to depend on other global powers in such essential technology, e.g. for security or performance reasons, the EU states have to be able to design and produce these components themselves.

The microelectronics projects general objective is to enable research and develop innovative technologies and components (e.g. chips, integrated circuits, and sensors) that can be integrated in a large set of downstream applications. These include consumer devices, for example home appliances and automated vehicles, and commercial and industrial devices, for example the management systems for batteries used for electric mobility and energy storage.

In particular, the project is expected to stimulate additional downstream research and innovations in particular in relation to the broad area of the Internet of Things and to connected or driverless cars.      

The 4-states’ project participants and their partners will focus their work on five different micro-technology areas:

= Energy efficient chips: developing new solutions to improve the energy efficiency of chips, which e.g. would reduce electronic devices’ overall energy consumption;

- Power semiconductors: developing new technologies of components for smart appliances as well as for electric and hybrid vehicles, to increase the reliability of final semiconductor devices.

- Smart sensors: developing new optical, motion or magnetic field sensors with improved performance, enhanced accuracy and improve car safety;

- Advanced optical equipment: developing more effective technologies for future high-end chips; and

- Compound materials: developing new compound materials (instead of silicon) and devices suitable for more advanced chips.

All five technology fields are complementary and interlinked: e.g. chips are not typically sold by themselves but are often supplied as part of an integrated system. Such systems require a combination of processes and technologies covered by the different fields of the project. For this reason, the project participants will be involved in over 100 collaborations across the different areas in the 40 closely interlinked sub-projects.

Funding beneficiaries and amounts

four EU states. The direct participants could receive by the respective national administrations a total of up to approximately €1.75 bn in funding. More specifically, France has sought approval to grant aid provide funding of up to €355 bn, Germany up to €820 bn, Italy up to €524 bn and the UK up to €48 bn.

The following are the direct participant states supporting different project areas:

Some issues have been raised concerning the connection of public funding for the integrated project in microelectronics with the European rules for state; however, the Commission acknowledged that supporting microelectronics contributes to a common European interest and in that sense are complied with the EU state aid rules. That means that this sphere of research can be extensively financed from the state budget without violating EU’s competition rules. Research and innovation in microelectronics can help the states in supporting the emerging market as soon as it alone cannot take the risk. The Commission’s decision is a result of enhanced cooperation and shared European vision in the most advanced technology’s sphere.

General reference: Commission press release/18.xii.2018 in:

http://europa.eu/rapid/press-release_IP-18-6862_en.htm?locale=en