The Dutch government wants to invest €230 million in the European chip industry. The funding’s intended for NXP, ASML, Nearfield Instruments, ThermoFischer and SMART Photonics.
The plan has been known since 2021. On 21 September, the government presented a budget of 300 million for investments in two sectors: the chip industry and cloud infrastructure. Now, the next step comes to light.
The Netherlands wants to finance €230 million for six projects among five organizations: radar and 6G development (NXP), new machines for advanced chip production (ASML and Nearfield Instruments), test technology for chips (ThermoFischer) and photonic chips (SMART Photonics). The plan has been submitted to the European Commission by the Ministry of Economic Affairs. The Commission will assess the proposal and decide accordingly.
Typically, European member states aren’t allowed to offer state aid to technology companies. The European Commission wants to guard a free market. Sometimes, an exception is made. If a project contributes to an European interest, a member state may invest. The regulation is called IPCEI, short for Important Projects of Common European Interest. Both cloud infrastructure and chip development fall under an IPCEI.
As mentioned earlier, the Dutch plan has been submitted to the European Commission. The timing of the proposal wasn’t left to chance. The European Commission has every right to reject a plan, meaning a member state cannot offer state aid to a sector. By submitting the proposal now, the Netherlands increases its chances of success. The European Commission recently urged all member states to act on the European chip shortage as quickly as possible. At the same time, Brussels introduced the European Chips Act, a bill that allows member states to invest in chip manufacturers in the long term. The Chips Act may take quite some time to be adopted. Meanwhile, the chip shortage rages on. Resultingly, the European Commission has little reason to reject the investments proposed by The Netherlands.
In addition to the chip industry, the Netherlands earmarked 70 million for cloud infrastructure development. The funding’s intended for organizations that set up infrastructure and services for cyber security, interoparability and sustainability in Europe.