The European Commission said it has ended its investigation into an Italian state grant of Ecu18 million to chipmaker SGS-Thomson Microelectronics, after the Italian government withdrew its proposal in the face of criticism from EC regulators.
Competition commissioner Karel Van Miert failed earlier this year to muster 10 out the necessary 11 commissioners to vote in favour of outlawing the aid, for research and development, after research commissioner Edith Cresson won limited support for it.
"In May 1997, the commission competition services proposed to forbid the granting of aid to SGS-Thomson because the project was not eligible for funding as research and development within the meaning of state aid rules," the commission said today.
"Indeed the work corresponded to sustained engineering efforts being carried out by several semiconductor companies in Europe without public funding. The commission's analysis demonstrated that the proposed aid threatened to distort competition by disadvantaging other semiconductor companies in Europe," it said.
The commission opened an investigation into the proposed aid in July 1996 and carried out a detailed study on technology trends in the power semiconductor sector from the start of the project in 1993 to mid-1997.
"The findings were that the tasks described in the aid proposal were those required by any power semiconductor manufacturer in 1993, whereas by mid-1997, the products described in the aid proposal existed on the market in one form or another," the statement said.
The aid was proposed for 58 integrated circuits in five end product areas, including computer and power supply, telecoms, automotive, audio and radio, and other advanced applications.
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