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Commission approves €146.5 million Austrian support in favour of companies joining research and innovation project in microelectronics

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The European Commission has approved, under EU state aid rules, €146.5 million in Austrian support in favour of three companies joining the existing Important Project of Common European Interest (‘IPCEI') in microelectronics approved by the Commission in 2018. The public funding is expected to unlock an additional €530m of private investments, i.e. more than three and a half times the public support.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “To deliver on the digital and green transition, we will need highly innovative and sustainable microchips and sensors for many products in our economy, ranging from mobile phones to aircraft. The Important Project of Common European Interest in microelectronics that we approved in 2018 has been supporting the development of important cutting-edge technologies in this field. The IPCEI's integration is very important for its success – we have approved additional support by Austria to three projects because they meet the high bar of adding significant value to the existing IPCEI, with important collaborations with the existing participants.”

In December 2018, the Commission approved, under EU state aid rules, an IPCEI to support research and innovation in the field of microelectronics (the ‘2018 IPCEI Microelectronics'). The project was jointly set-up and notified by France, Germany, Italy and the United Kingdom. The approved public support amounted to €1.75 billion. The 2018 IPCEI Microelectronics, which aims at developing innovative microelectronics technologies and components for automotive, Internet of Things (IoT) and other key applications (such as space, avionics, and security) and their first industrial deployment, originally involved 27 companies and two research organisations.

In December 2020, Austria notified to the Commission its plans to join the 2018 IPCEI Microelectronics, by providing €146.5m of public support to three companies (Infineon Austria, AT&S Austria and NXP Semiconductors Austria) that will carry out additional research and innovation falling within the scope and contributing to the objectives of the existing IPCEI. The companies will focus in particular on the areas of security, energy efficiency, and integration of packaging technologies for microelectronics.

The joining of an already established and ongoing IPCEI by an additional member state and projects is an exceptional circumstance. It requires a complex assessment by the Commission, to verify that the new individual projects are properly integrated in the existing roadmap and structure of the IPCEI, for example by means of establishing sufficient and valuable collaborations with the initial participants, and are genuinely adding significant value to the IPCEI in order to reach its objectives.

The Commission takes note of and welcomes the increasingly transparent, open and inclusive practice that member states have now established in designing IPCEIs to ensure that all interested member states join from the start, so that these important European projects generate even more benefits to the entire EU without unduly distorting competition.

The Commission's assessment

The Commission assessed Austria's plans under EU state aid rules, more specifically its Communication on Important Projects of Common European Interest (IPCEI). Where private initiatives supporting breakthrough innovation fail to materialise because of the significant risks such projects entail, the IPCEI state aid Communication enables member states to jointly fill the gap to overcome these market failures, while ensuring that the EU economy at large benefits and limiting potential distortions to competition.

The projects that Infineon Austria, AT&S Austria and NXP Semiconductors Austria will carry out aim at delivering additional technological innovations in energy efficient power semiconductors, on advanced security and interconnections, as well as on organic packaging technology aspects.

In this respect, the Commission found that the projects will add significant value to the 2018 IPCEI Microelectronics and will contribute to and enhance the integration of existing IPCEI. In particular:

  • They will significantly contribute to the achievement of common objective pursued by the existing IPCEI in supporting a strategic value chain, in particular through the development innovative microelectronics, technologies and components for automotive, IoT and other key applications (such as space, avionics, and security), by aiming at technology solutions that were not (sufficiently) addressed.
  • They will add significant value to the existing IPCEI by bringing important contributions to its objectives, integration, collaborations, scope, and research and development content.
  • They are highly ambitious, aiming at developing technologies and processes that go beyond current technology.
  • The companies will establish significant and valuable additional collaborative research with the existing direct partners and support the development and objectives of the relevant technology fields.
  • The projects involve significant technological and financial risks, and public support is therefore necessary to provide incentives to companies to carry out the investment.
  • The aid to each of the three companies is limited to what is necessary, proportionate and does not unduly distort competition.
  • Additional important positive spill-over effects will be generated throughout Europe.

On this basis, the Commission concluded that the Austrian plans to join the 2018 IPCEI Microelectronics are in line with EU State aid rules.

Background

In June 2014 the Commission adopted a Communication on important projects of common European interest (IPCEI), setting out criteria under which Member States can support transnational projects of strategic significance for the EU under Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU). This framework aims to encourage Member States to support projects that make a clear contribution to the EU strategic objectives.

The IPCEI Communication complements other State aid rules such as the General Block Exemption Regulation and the Research, Development and Innovation Framework, which allows supporting innovative projects with generous conditions.

Since 2014, the IPCEI Communication has been applied in the field of infrastructure as well as for integrated projects in the area of research and innovation, for microelectronics (in December 2018) and for the battery value chain (in December 2019 and in January 2021).

The IPCEI Communication is currently being reviewed to ensure it fully contributes to the Commission's green and digital objectives, following an evaluation or ‘Fitness Check' completed in October 2020. On 23 February 2021, the Commission launched a public consultation inviting all interested parties to comment on the draft revised IPCEI Communication. In this context, the Commission is proposing, among others, to further enhance the open character of IPCEIs (by, for example, providing that all Member States must be given a genuine opportunity to participate in an emerging project).

Stakeholders can respond to the consultation for eight weeks, until 20 April 2021.

The non-confidential version of the decision will be made available under the case number SA.56606 in the State Aid Register on the competition website once any confidentiality issues have been resolved.

New publications of state aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

Austria

Austria and Denmark to work with Israel on vaccines

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Austrian Chancellor Sebastian Kurz (pictured) said Austria and Denmark would work with Israel on vaccine production against mutations of the coronavirus and jointly research treatment options, according to press reports, writes Yossi Lempkowicz.

The two countries no longer want to be ‘’only’’ dependent on the EU for vaccines.

Kurz and Denmark’s Prime Minister Mette Frederiksen plan to visit Israel on Thursday to discuss “an international corporation for manufacturing vaccines,” Netanyahu was quoted by Reuters as saying.

The Austrian leader said it was right that the EU procures vaccines for its member states but the European Medicines Agency (EMA) had been too slow to approve them and he lambasted pharmaceutical companies’ supply bottlenecks.

The European Commission said member states were free to strike separate deals should they wish to. “It’s not that the strategy unravelled or it goes against the strategy, not at all,” an EU Commission spokesperson said.

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Austria

Investment Plan for Europe in Austria: Fresh lending to help households and businesses build energy-efficient homes 

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The EIB Group has provided a financial guarantee to Hypo Vorarlberg Bank in Austria to expand its lending capacity for households, SMEs and mid-cap customers. This agreement is backed by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe. Thanks to this new agreement, Hypo Vorarlberg will be able to support the construction of highly energy-efficient residential buildings, thus helping the environment and the Austrian economy in the challenging COVID-19 context.

Economy Commissioner Paolo Gentiloni said: “Thanks to this support from the Investment Plan for Europe, Hypo Vorarlberg will be able to increase its lending capacity to households, SMEs and mid-caps for the construction of new energy-efficient homes. This initiative will help the hard-hit construction sector in this difficult time, as well as contributing to the achievement of our climate goals.”

The press release is available here. The Investment Plan for Europe has so far mobilized €535 billion of investment across the EU, benefitting over 1.4 million SMEs in total.

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Austria

Commission approves Austrian measures to support rail freight and passenger operators affected by the coronavirus outbreak

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The European Commission has approved, under EU state aid rules, two Austrian measures supporting the rail freight sector and one measure supporting the rail passenger sector in the context of the coronavirus outbreak. The two measures supporting the rail freight sector will ensure increased public support to further encourage the shift of freight traffic from road to rail, and the third measure introduces temporary relief for rail operators providing passenger services on a commercial basis.

The Commission found that the measures are beneficial for the environment and for mobility as they support rail transport, which is less polluting than road transport, while also decreasing road congestion. The Commission also found that the measures are proportionate and necessary to achieve the objective pursued, namely to support the modal shift from road to rail whilst not leading to undue competition distortions. Finally, the waiver of infrastructure access charges provided for in the second and third measures described above is in line with the recently adopted Regulation (EU) 2020/1429.

This Regulation allows and encourages member states to temporarily authorize the reduction, waiver or deferral of charges for accessing rail infrastructure below direct costs. As a result, the Commission concluded that the measures comply with EU state aid rules, in particular the 2008 Commission Guidelines on state aid for railway undertakings (the Railway Guidelines).

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The measures approved today will enable the Austrian authorities to support not only rail freight transport operators, but also commercial passenger operators in the context of the coronavirus outbreak. This will contribute to maintaining their competitiveness compared to other modes of transport, in line with the EU Green Deal objective. We continue working with all member states to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules.”

The full press release is available online

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