EU Approves $2 Billion for IoT, Connected Car Research

　　The European Commission has cleared the use of €1.75 billion (about $2 billion) in public funds from France, Germany, Italy, and the U.K. to support an integrated project for joint research and innovation in microelectronics addressing the internet of things and connected or driverless cars.

　　The clearance was necessary to ensure that the funding would be in line with EU state aid rules and contributes to a common European interest, a key condition for public support. The integrated research and innovation project will involve 29 direct participants, headquartered both in and outside the EU, carrying out 40 closely interlinked sub-projects. These direct participants will work in collaboration with wider partners, such as other research organizations or small- and medium-sized enterprises (SMEs), also beyond the four member states.

　　The project’s overall objective is to enable research and develop innovative technologies, chips, and sensors that can be integrated in applications such as consumer devices, automated vehicles, commercial devices, and industrial devices, including management systems for batteries in electric mobility and energy storage. In particular, the project is expected to stimulate additional research and innovations in relation to the internet of things and to connected or driverless cars.

　　The 29 participants in the microelectronics research project cleared by the European Commission.

　　Participants and their partners will focus their work on five different technology areas:

　　(1) Energy-efficient chips: developing new solutions to improve the energy efficiency of chips. These will, for example, reduce the overall energy consumption of electronic devices, including those installed in cars.

　　(2) Power semiconductors: developing new component technologies for smart appliances as well as for electric and hybrid vehicles to increase the reliability of semiconductor devices.

　　(3) Smart sensors: working on the development of new optical, motion, or magnetic field sensors with improved performance and enhanced accuracy. Smart sensors will help improve car safety through more reliable and timely reaction to allow a car to change lanes or avoid an obstacle.

　　(4) Advanced optical equipment: developing more effective technologies for future high-end chips.

　　(5) Compound materials: developing new compound materials (instead of silicon) and devices suitable for more advanced chips.

　　The project participants will be involved in over 100 collaborations across the different areas in 40 closely interlinked sub-projects. It’s thought that in addition to the €1.75 billion funding provided by each of the four countries, the project will unlock an additional €6 billion ($6.84 billion)  in private investment. The project should be completed by 2024 (with differing timelines for each sub-project).

　　The idea of such funding is to enable risky and ground-breaking research and innovation whilst ensuring that its benefits are shared widely and do not distort the level playing field in Europe. The innovations supported by taxpayer money are supposed to be of benefit to European citizens as a whole.

　　The European Commission says that investment in research in microelectronics at this scale is a major transnational innovation project. It carries a considerable element of risk; therefore, public support is appropriate and necessary to incentivize companies to carry out these ambitious activities. Microelectronics is considered a key enabling technology with applications in multiple industries and in helping to tackle societal challenges.

　　The results of the research project will be disseminated by participating companies benefiting from public support. In this context, an annual conference on the project will be organized, the first of which will be held in November 2019. Furthermore, companies will host a series of technical events on their respective sub-projects.

　　Commissioner Margrethe Vestager, in charge of competition policy, said, “Innovation in microelectronics can help the whole of Europe leap ahead in innovation. That’s why it makes sense for European governments to come together to support such important projects of common European interest if the market alone would not take the risk. And it is why we have put special state aid rules in place to smooth the way.”

　　In addition, Commissioner Mariya Gabriel, in charge of digital economy and society, said, “If we don’t want to depend on others for such essential technology [microelectronics] — for example, for security or performance reasons — we have to be able to design and produce them ourselves.”

　　The rules support investments for research, development and innovation, and first industrial deployment on the condition that the projects receiving this funding are highly innovative and do not cover mass production or commercial activities. They also require extensive dissemination and spillover commitments of new knowledge throughout the EU and a detailed competition assessment to minimize any undue distortions in the internal market.

　　The project is unlikely to be affected by Brexit. We asked the Commission for clarification and were told that the U.K.’s withdrawal agreement would have been agreed upon at the negotiator’s level but still needs to be concluded by the EU and ratified by the U.K. before it can enter into force. There is then likely to be a transition period (which will last until the end of December 2020 unless extended). During this transition period, the entire body of EU law will continue to apply to, and in, the U.K. as if it were a member state. This includes all EU rules relating to state aid. So funding support will remain binding on and in the U.K.

　　The project sets out the maximum amount of aid authorized for each of the beneficiaries, and the U.K. is expected to grant aid within these maximum amounts. Once state aid has been approved by the European Commission, member states are authorized to grant the aid and normally do so.