X-FAB breaks ground on a €300m-plus fab with taxpayers paying €1.27m a job
Germany and Thuringia are putting €127.4m into Fab4Micro, up to 42% of its cost, to unlock a MEMS and photonics line that grew 14% while group revenue fell. First wafers are due at the end of 2028, and the demand has to hold that long.
Vincent Jiang · 2 min read
Berlin and Thuringia are buying 42% of the build
X-FAB lays the foundation stone on Monday, 5 October, for Fab4Micro, a new chip fab at its Erfurt site, the operational hub where roughly 800 of the group's 4,000 employees work 12. The company puts the build at €300m to €400m, and the state is in for €127.4m of it 1.
Berlin contributes €80.3m and Thuringia €47.1m, per the state government 1, under aid the European Commission cleared on 11 December 2025 in a €623m package that also handed €495m to GlobalFoundries for Dresden 3. About 100 jobs are planned, so the public purse is paying roughly €1.27m a job to unblock a line that earned $28.7m last quarter 24. At the €300m floor, that is 42% of the build.
The reason is a bottleneck, not a speech
Thuringia's premier Mario Voigt calls Fab4Micro a key project for Europe's technological sovereignty 2. The reason, in X-FAB's own quarterly filing, is simpler: the existing MEMS fab runs near capacity and the new facility is essential to meet existing customer demand in the group's fastest-growing business 4. That line grew 14% year on year in Q2 2026, while group revenue fell 7% to $199.8m, automotive dropped 19% and EBIT fell 90% to $2.1m 4.
The line Fab4Micro serves grew 14% while the group's revenue fell 7%
Data
| Value | |
|---|---|
| Medical | 39% |
| Wide bandgap (SiC, GaN) | 34% |
| Microsystems & photonics | 14% |
| Industrial | -4% |
| Group total | -7% |
| Automotive | -19% |
The AI payoff carries a 2028 date
Photonics volume production is expected to begin in 2028, led by co-packaged optics and data communications, and X-FAB puts long-term data-center revenue potential across its units at roughly $300m a year 4. First Erfurt wafers are slated for late 2028 17; the Commission's approval puts commercial operation in 2029, with both aid recipients committed to priority orders in a crisis 3.
East Germany's bigger bets went the other way
Intel cancelled its planned Magdeburg plant, the ESMC consortium's €10bn Dresden project carries €5bn in federal aid, and Infineon doubled its Dresden capacity in July 5. Erfurt is the counter-bet: about 100 specialised jobs on a niche line, in a city whose semiconductor tradition dates back to the East German Kombinat Mikroelektronik 8.
Erfurt's €127.4m is a fraction of what Dresden's two projects draw
Data
| Value | |
|---|---|
| Fab4Micro, Erfurt | €127.4m |
| GlobalFoundries, Dresden | €495m |
| ESMC, Dresden | €5,000m |
The state caps its risk, shareholders carry the wait
X-FAB, listed in Paris as XFAB, jumped 7.1% to €6.13 when the grant split surfaced on 25 August and closed at €7.03 on 2 October, far under its 52-week high of €17.10 64. Most of the spend sits ahead: first-half capex was $50.2m against net debt of $312.3m 4. Shareholders carry the demand risk to first output, and the microsystems line already fell 15% sequentially in Q2, which the company calls normal fluctuation 4. Q3 results land on 29 October 4.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
