Advanced Semiconductor Technologies
IPCEI AST
Developing a new or disruptive semiconductor technology? IPCEI AST may offer an opportunity for your project to progress from R&D to first industrial deployment through European collaboration.
FIND OUT MOREIPCEI Advanced Semiconductor Technologies
Europe’s semiconductor competitiveness is entering a new phase
Semiconductors now underpin almost every strategic technology: they are essential in the automotive industry, energy, telecommunications, artificial intelligence, industrial automation and digital infrastructure. It is therefore increasingly important for Europe to ensure that a greater share of critical chip technologies, manufacturing solutions and related R&D capabilities are available within the Union.
This is the objective of IPCEI Advanced Semiconductor Technologies (IPCEI AST), which is currently being developed at European level. The initiative aims to connect large-scale semiconductor projects with a high degree of innovation that involve significant technological risk, are strategically important for Europe and would be difficult to finance solely under market conditions.
The objective of IPCEI AST is not simply to create new manufacturing capacity, but to support the research, development and First Industrial Deployment of advanced and disruptive semiconductor technologies.
What does IPCEI AST mean for companies?
IPCEI Advanced Semiconductor Technologies may be particularly relevant for companies developing new technology at any point in the semiconductor value chain, where the project goes beyond a traditional investment or capacity expansion.
A new production line or the higher-volume deployment of an established technology would not, in itself, typically qualify as an IPCEI-type project. The framework focuses on developments that deliver meaningful technological progress beyond the current international state of the art, involve substantial R&D risk, and can be connected with other European companies or research stakeholders.
Eligible activities may range from research, development and innovation to First Industrial Deployment (FID). Mass production and purely commercial activities, however, are outside the focus of IPCEI AST.
What types of developments is IPCEI Advanced Semiconductor Technologies looking for?
IPCEI AST covers seven major technology areas which, together, encompass a significant part of the advanced semiconductor value chain.
- AI chips and accelerators: processors optimised for artificial intelligence, ASIC architectures, hardware-software co-design, new computing architectures and open solutions such as RISC-V.
- Chiplets, heterogeneous integration and advanced packaging: modular chip architectures, interposers, complex system-on-chip solutions, and advanced packaging and testing technologies.
- Integrated photonics: photonic integrated circuits, optical interconnects, co-packaged photonics and next-generation photonic solutions.
- Advanced sensors: imaging, MEMS, bio-, quantum-, radar- and LiDAR technologies for autonomous systems, as well as sensor fusion.
- Power electronics and energy efficiency: including GaN, SiC and ultra-wide-bandgap technologies, new device architectures and energy-efficient solutions.
- Secure communication technologies: hardware solutions related to next-generation networks, post-quantum cryptography and secure optical communications.
- Technologies supporting the semiconductor value chain: EDA tools, manufacturing and test equipment, advanced materials, metrology and critical industrial inputs.
This broad technological scope means that potential participants are not limited to chip manufacturers. The value chain may also include companies developing design software, materials technology businesses, manufacturers of measurement and testing equipment, and specialised sensor or photonics developers.
Where is the line between a semiconductor investment and an IPCEI project?
One of the most important criteria of IPCEI AST is meaningful technological novelty. It is not sufficient for an investment to be large or strategically important: from an innovation perspective, the project must also go beyond the current global state of the art.
| Traditional semiconductor investment | Potential IPCEI AST project |
| Application of existing technology | Development of new or disruptive technology |
| Primary objective: capacity expansion | Primary objective: technological advancement |
| Lower technological risk | Significant R&D and industrialisation risk |
| Project within a single company | Cross-border cooperation |
| Mass production | R&D and First Industrial Deployment |
The key question is therefore whether the project creates a new technological capability in Europe, rather than simply applying an established solution on a larger scale.
From research and development to First Industrial Deployment
In the semiconductor industry, the gap between a research result and industrial-scale application can be particularly wide. Demonstrating a new chip architecture, material or packaging technology in the laboratory does not yet mean that it can be applied economically, with stable quality and under industrial conditions.
IPCEI AST specifically targets this critical development stage. In addition to R&D and innovation activities, the framework may also cover First Industrial Deployment, i.e. the point at which the new technology first reaches industrial-scale implementation. According to the background material, the initiative may typically target developments from intermediate technology readiness levels, roughly TRL 4-5, through to TRL 8.
This is particularly important in an industry where development cycles are long, the required equipment is expensive, and a technological dead end can result in significant losses.
How does IPCEI AST relate to the European Chips Act?
IPCEI AST does not address Europe’s semiconductor challenges on its own. It complements the toolbox of the European Chips Act, while serving a different role in the innovation cycle.
IPCEI primarily targets high-innovation, collaborative R&D and First Industrial Deployment projects. In parallel, the European Chips Act plays an important role in expanding semiconductor capacity and enabling new first-of-a-kind manufacturing facilities.
Put simply, IPCEI can provide a support framework for technological breakthroughs and their First Industrial Deployment, while the Chips Act can, among other things, support industrial scale-up and capacity strengthening. The two instruments can therefore complement each other across different stages of innovation and industrialisation.
European cooperation is not optional
A fundamental principle of IPCEI AST is that supported projects should not operate as isolated national investments, but should form a genuine European value chain.
Following national pre-screening, a European matchmaking process therefore begins, during which companies identify technology partners, align their development roadmaps and define how the different projects connect to one another. According to the background material, the cooperation must meaningfully connect several Member States.
The objective is, for example, for a new materials technology, a chip design solution, a manufacturing process and a testing technology not to develop independently of one another, but to form an interconnected European innovation chain.
Why are spillover effects important?
IPCEI projects must create value not only for the individual company. The results of the supported developments must also have a broader economic and technological impact across Europe.
Spillovers may take the form of disseminating research results, cooperation with universities and research institutions, new industry standards, supplier relationships, knowledge sharing or the creation of technology platforms that can also be used by other European stakeholders.
This is particularly important in a semiconductor project because the value chain is highly interconnected: a new manufacturing process, material or design technology may indirectly improve the competitiveness of many other companies.
Why may state aid be necessary?
Semiconductor developments are extremely capital-intensive and involve significant technological risk. Developing a new solution requires specialised equipment, long testing cycles, highly skilled professionals and, in many cases, substantial upfront investment.
Under IPCEI, it must therefore also be demonstrated that the project is affected by a market failure or financing barrier and that state aid is genuinely necessary for implementation.
A key tool for this is the funding gap analysis. It shows how the project would proceed without support and what level of aid may be justified to enable a development with higher technological ambition. The aid must be necessary and proportionate.
How is an IPCEI AST project structured?
The process consists of national and European stages:
- National call for expressions of interest and project identification
- National pre-screening and selection
- European matchmaking and consortium building
- Development of the integrated European project
- Pre-notification discussions with the European Commission
- Formal state aid approval
- National aid agreement and project implementation
Throughout the process, the company must substantiate its project in detail from both a technological and business perspective. The background material highlights the Project Portfolio, the Funding Gap Questionnaire and PRODCOM documentation supporting the competitive market analysis as important elements of the pre-notification discussions with the Commission.
What could IPCEI AST mean for companies in Hungary?
The semiconductor industry is not limited to wafer manufacturing. The value chain includes many technological areas in which Hungarian companies, research organisations or the Hungarian development centres of multinational companies may also find a role.
Potentially relevant areas include sensor technologies, power electronics, AI hardware, photonics, chip design, industrial testing, materials technology, EDA development, and specialised equipment and software related to manufacturing processes.
Hungary’s industrial base can be particularly valuable in automotive, energy and electronics applications, where the First Industrial Deployment of new semiconductor technologies can be tested in real production environments.
The strategic opportunity therefore goes beyond access to a subsidy. A well-positioned project can connect Hungarian development capabilities to an emerging European semiconductor value chain.
When should a company consider an IPCEI AST project?
IPCEI Advanced Semiconductor Technologies may be relevant if the company’s project:
- meaningfully goes beyond the current state of the art;
- involves significant R&D and industrialisation risk;
- may extend from the research phase through to First Industrial Deployment;
- can be technologically connected with other European stakeholders;
- creates spillover effects beyond the company itself;
- would not be implemented, would be implemented on a smaller scale, or would take place later without support.
IPCEI AST may therefore offer a strategic opportunity primarily to companies that are not merely seeking to expand semiconductor capacity, but aim to create new technology as part of a coordinated European innovation ecosystem.
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