Newly published guidelines to apply to the EU ‘first of a kind facilities’ status

On January 30, 2024, the European Commission announced the publication of the guidelines on the application process for the status of integrated production facility and open EU foundry. 

According to the second pillar of the European Chips Act, entered into force on September 21, 2023, ‘first of a kind facilities’ can request the status of Integrated production facilities (IPF) and open-EU foundries (OEF) to have access to fast track permits for administrative applications and priority access to pilot lines. 

Which facilities qualify as ‘first of a kind’?

In episode five of the series entitled ‘Global Chips: from crisis to strategies’, we discussed the funding of the AU Chips Act and analyzed in depth the opportunities presented in the second pillar, for SMEs.

‘First of a kind’ facilities, must be contributing to Europe’s security of supply and specifically, to its innovation. The facilities must not yet be present on the EU market, therefore they must be newly established or upgraded. 

What is the difference between IPFs and OEFs?

On one hand, Open EU foundries (OEFs) are semiconductor manufacturing facilities that allocate a portion of their production capacity to manufacture chips based on the designs of other companies, particularly fabless companies. On the other hand, Integrated production facilities (OPFs) refer to vertically integrated semiconductor manufacturing plants. These facilities engage in front-end manufacturing, produce equipment or crucial components predominantly utilized in semiconductor manufacturing within the Union, and are also involved either in integrated circuit design or providing back-end services, or both.

What is their role?

These facilities will hold a crucial role in granting security of supply. The third pillar of the European Chips Act (ECA), deals with monitoring and crisis response, outlining the steps to take in case of the disruption of a Value Chain. After having monitored and mapped the Value Chain, and identified where the disruption has occurred, the Commission intensifies the coordination with the European Semiconductor Board and can decide to enact one or more of the emergency tools it has designed. One of these tools is the ‘Priority Rated Orders’ (PROs), which is an obligation for certain manufacturers - like OEFs and OPFs - to accept and prioritize the production of specific orders to critical sectors. 

While applying for IPF and OEF status differs from the State aid assessment of first-of-a-kind projects, the Commission aims to conduct both procedures and their assessments simultaneously, whenever possible.
More about the guidelines and registration here