Commissie geeft Infineon toestemming voor opening chips-fabriek in Portugal (en)

dinsdag 16 maart 2004

The aid will be given as investment aid in the form of a loan to be partially transformed into a non-reimbursable grant and of an income tax exemption for profits deriving from the notified investment. The aid authorised today amounts to € 41,5 million. In net terms this aid corresponds to 29.4% of the overall investment costs of a project located in Vila do Conde (Grande Porto), an assisted area under the EC Treaty. The maximum allowable aid intensity for large undertakings in this region is 32% net. The requested aid could thus be approved in its entirety.

The beneficiary of the aid, Infineon Portugal, is a wholly owned subsidiary of Infineon Technologies, NV, which is itself controlled by Infineon Technologies AG ("Infineon"). Infineon went public in March 2000 and is a spin-off of Siemens AG comprising its semiconductor activities.

Infineon Portugal is a back-end unit, active in the assembly and final testing of DRAMs (Dynamic Random Access Memory). According to the Portuguese authorities, the Infineon plant located in Portugal is the only back-end unit in the DRAM production sector in Europe.

The intended aid to Infineon, which had to be notified because of the level of the investment and the amount of aid proposed, was assessed under the rules of the 1998 Multisectoral Framework on regional aid for large investment projects (the "1998 MSF"). The latter establishes that the maximum aid allowed for a given project depends on three factors,

  • is the market expanding or declining (competition factor);

  • the ratio investment per job created (capital-labour factor); and

  • the project's positive regional impact (i.e. its contribution to the creation, by other companies in the same region, of new jobs) (Regional impact factor).

In the case at issue, the Commission has assessed the above-mentioned three cumulative criteria as follows:

  • Competition factor. According to the Commission's market investigation, the average annual growth rate of apparent consumption indicated a market that, when compared to the growth rate of the general manufacturing industry, was not in decline.

  • Capital-labour factor. Portugal claims that the investment created 252 new jobs and safeguarded 596 existing jobs (the full pre-investment workforce of the company). As regards the new jobs, the Commission considers that the figure is reasonable for an increase in production of 150%.

  • Regional impact factor. Finally, Portugal claimed that the investment created 30 indirect jobs in the region. Since this figure is modest in relation to the size of the investment, the Commission accepts it and sets the regional impact factor at 1.

Background

On 9 July 2003, the Commission launched an in-depth probe into aid planned by the Portugese authorities for the extension of a Infineon semiconductor plant located in Vila do Conde, Portugal (IP/03/977). The project was launched in June 2000 and completed in September 2003.

The project aims at increasing the company's competitiveness by expanding its production from 16 and 64 Mb DRAMs to 256 and 512 Mb DRAMs. In addition, the project comprised the introduction of a new so-called "board on chip" technology which increased the value of the final product. As a consequence of the investment, total output increased from 2 to 5 million chips per week.

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