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EU Nations Advance €43 Billion Plan to Become Semiconductor Hub

Employees prepare to enter a clean room inside the Infineon Technologies AG semiconductor factory in Villach, Austria.

Employees prepare to enter a clean room inside the Infineon Technologies AG semiconductor factory in Villach, Austria.

Photographer: Akos Stiller/Bloomberg

European Union nations agreed to pursue a €43 billion ($44.4 billion) plan to jump-start the bloc’s semiconductor production, clearing a key hurdle in its plan to bolster high-tech industry.

The deal was backed Wednesday by EU ambassadors, according to people familiar with the matter. It would expand the scope of what chip plants are considered “first-of-a-kind” and qualify for state aid, but stops short of allowing all automotive chips to qualify for funds, which some countries had demanded earlier this fall.