IP/08/137
Brussels, 31 January 2008
State aid: Commission endorses €165.6 million regional aid to Qimonda for DRAM wafer project in Dresden, Germany The European Commission has authorised, under EC Treaty state aid rules, €165.6 million of regional aid, which the German authorities intend to grant to Qimonda for the conversion of its existing and the construction of a new DRAM wafer plant in Dresden. The Commission found the measure to be compatible with the Single Market, as it meets the requirements of the applicable 1998 Regional Aid Guidelines and the rules for regional aid for large investment projects of 2002 (see IP/02/242). The high-tech investment project of €1.2 billion by Qimonda will significantly contribute to the regional development of Saxony and does not exceed any of the relevant assessment thresholds on aid intensity, market power and additional production capacity. Competition Commissioner Neelie Kroes said: “I am pleased to approve this aid for an important investment project in a high tech sector which will contribute to not only regional development and job creation in a disadvantaged region of Germany, but also benefit the competitiveness of the European economy as a whole .”
The investment project includes the conversion of an existing plant and the construction of a new plant for the production of DRAM wafers. DRAMs (also known as "memory chips") are highly complex microchips that are used in computers, entertainment electronics, games consoles, mobile communications, household equipment and other electronic devices. The investment project involves eligible costs of €1.2 billion and an aid amount of €165.6 million, and will create about 480 additional jobs.
The project is to be carried out in the region of Saxony, a disadvantaged area with an abnormally low standard of living and serious unemployment eligible for regional aid under Article 87(3)(a) of the EC Treaty. The aid is to be granted under aid schemes previously approved by the Commission, in particular the 2007 Investment Premium Law (see IP/06/1704). However, due to the large amounts of aid involved, the aid to Qimonda had to be notified to the Commission for individual assessment.
The Commission’s assessment of regional aid to large investment projects focuses on the market power of the beneficiary and on the production capacity created by the investment on the European market. Qimonda's share of the relevant market is less than 25%, both before and after the planned investment. The Commission also verified that the capacity increase generated by the project would be below 5% of the apparent consumption of the product concerned in the EEA. As a result, the Commission concluded that the aid does not raise competition concerns and is compatible with the common market.
The non-confidential version of the decision will be made available under the case number N 872 / 2006 in the State aid Register on the DG 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 State Aid Weekly e-News.
