Dáil Éireann Debate, Tuesday - 21 May 2024
257. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the scope for the State to utilise the EU Chips Act Regulation 2023 to allow Ireland to provide State subsidies for chip factories and fab manufacturing and avoid EU state aid implications; and if he will make a statement on the matter. [22922/24]
Amharc ar fhreagraAs the Deputy will appreciate, State Aid generally refers to forms of State-controlled financial resources given to undertakings on a discretionary basis and with the potential to distort competition and affect trade between Member States of the EU. As such, State Aid is prohibited under the Treaty on the Functioning of the EU because of its anti-competitive effects. However, various categories of schemes are considered compatible, as their positive effects are considered to outweigh their negative impact. As such, the State Aid Framework performs a balancing act of economic policy to prevent distortion of fair competition, while also achieving worthy policy objectives, such as Regional Development, Environmental Protection or to promotion of Research and Development and Innovation (RDI) in Industry.
In this context, Pillar 2 of the EU Chips Act creates a framework to ensure security of semiconductor supply by attracting increased investment and production capacity in semiconductor manufacturing as well as in packaging and advanced testing and assembly. Under this pillar, undertakings granted the status of Integrated Production Facility or Open EU Foundry by the European Commission are considered to be in the public interest, and Member States may apply support measures including State Aid. In that context, Ireland will consider the provision of State Aid where appropriate to support the sector, after careful consideration of the appropriateness of providing such Aid in the context of our overall Enterprise Policy priorities while, of course, remaining conscious of competing demands on State finances. Under the EU Chips Act, projects would need to meet a set of criteria, including qualifying as 'first of a kind' in Europe and that the project could be lost to Europe if not supported. Any State supports for projects would also, of course, have to meet with our own national appraisal models applied by our enterprise development agencies.
Ireland has built an extensive and technology-rich semiconductor industry comprising of over 130 indigenous and foreign subsidiary companies across the microelectronics value chain. In this regard, the EU Chips Act offers a significant opportunity for Ireland to further foster this important, already strong, sector and much work is underway to facilitate this.
This includes participation in the Chips for Europe Initiative, which provides for the establishment of European pilot lines to test, experiment and validate semiconductor technologies and system design concepts, while reducing environmental impacts as much as possible. Furthermore, in April, my Department announced a call for expressions of interest for candidate Competence Centres under the Chips for Europe Initiative. The Irish Competence Centre will work closely with industry, research and technology organisations, universities, and the public sector to contribute to skills development and provide access to joint programmes, pilot lines and design services and tools. The successful candidate will facilitate the development of skills, talent and training and will act as a hub for the ecosystem.
Following a stakeholder consultation in March, my Department is progressing the formulation of a National Semiconductor Strategy which will be published in the coming months. The Strategy aims to ensure Ireland can play its proportionate part in reaching the EU Chips Act and Digital Europe target to double its current global market share of semiconductors to 20% by 2030. It will signpost actions for the sector and coordinate activity across stakeholders; provide a clear message to industry; focus on opportunities at EU level; and set an ambition and direction for activity in the sector to 2030.
