2023-06-09 16:20:11
EU Approves €8 billion subsidies - boost for tech sectorThe European Commission approved a tranche of €8.1 billion (US$8.6 billion) in public funds subsidies to produce Made in Europe semiconductors. The approval was made under the framework of the so-called "Important Projects of Common European Interest" (IPCEI).
The IPCEI is a type of undertaking that is supposed to benefit the countries that inject the aid and the entire European economy. Thus, the European Union hopes to boost domestic production of semiconductors and capture 20% of the global market by 2030.
The Commission hopes the public money will bring €13.7 billion in private investments, thus mobilising almost €22 billion between now and 2032. It said a total of 56 companies of different sizes to carry out 68 projects for the European region.
The European Commission's executive vice president, Margrethe Vestager, mentioned that the new raft of European subsidies for microchip projects would focus on researching and developing "resource-efficient technologies" like chips, processors, and sensors. Vestager said they need to be pioneers. They need to develop truly innovative solutions and become the first industrial deployment in Europe.
Overall, companies like
Intel Corp (INTC), GlobalFoundries (GFS), and
Wolfspeed Inc (WOLF) have all announced new investments.
Taiwan Semiconductor Manufacturing (TSM) is also looking at building a production site in Germany.
Some businesses, however, have been critical of the timeframe it took to get the IPCEI projects approved.
Intel Corp's share price has decreased by -20.47% year-to-date, and the last traded price was US$31.82. Bloomberg consensus rating has 9 Buys, 28 Holds, and 7 Sells with a 12-month target price of US$31.96
GlobalFoundries Inc's share price has increased by +11.77% year-to-date, and the last traded price was US$59.41. Bloomberg consensus rating has 12 Buys, 2 Holds, and 1 Sell with a 12-month target price of US$73.36
Wolfspeed Inc's share price has decreased by -26.72% year-to-date, and the last traded price was US$53.57. Bloomberg consensus rating has 12 Buys, 10 Holds, and 2 Sells with a 12-month target price of US$64.71
TSM's share price has increased by +10.01% year-to-date, and the last traded price was US$99.93. Bloomberg consensus rating has 14 Buys and 2 Holds, with a 12-month target price of US$112.21
Sources: Bloomberg, Euronews, European Commission
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