EC launches Infineon state aid probe

The European Commission has launched as "in-depth probe" into financial aid the Portuguese government plans to provide to a local DRAM plan owned by an Infineon subsidiary, the Commission said this week.

The investigation will focus on a proposed &euro:76.8 million ($87.4 million) grant from the Portuguese government to Technologies-Fabrico de Semiconductores SA for a plant based in Vila do Conde.

The EC's initial goal is to determine whether the company is eligible for the grant. Commission officials said that assessment will be based on whether "the proposed project would take place in a sector suffering from structural over-capacity". And they note: "The new Infineon plant is scheduled to produce DRAMs - a market where careful scrutiny of the development of sales proves necessary."

If Technologies-Fabrico de Semiconductores is found eligible for state aid, the EC will then determine whether the proposed grant exceeds limits set down by European regulations.

The EC said it will "give interested third parties, such as Infineon's competitors, an opportunity to submit their comments". Given almost all of the recent governmental investigations into DRAM makers have come as a result of complaints from rival memory producers, it's almost certain that said "Infineon competitors" will want to stick their oars in.

US Department of Commerce and European Commission investigations - and subsequent settings of punitive import duties - into South Korea's Hynix came at the behest of Micron and Infineon, respectively.

When Infineon's competitors will get their say isn't yet clear. While the EC has announced its investigation, it has not specified a schedule for the probe's progress. ®