EU prepared to invest ‘significant’ funds in chip sector

21 May 2021

Commissioner for the internal market Thierry Breton. Image: Claudio Centonze

The shortage of semiconductors for everything from computers to cars has forced the EU into action on domestic chip making.

As the global semiconductor shortage continues to bite, the EU remains determined to ramp up domestic chip manufacturing.

That’s according to Thierry Breton, the internal markets commissioner, who said this week that the EU would commit “significant” funds to expand semiconductor manufacturing and supply chains in Europe.

Several industries, from personal electronics to cars, are still feeling the pinch from an international shortfall in computer chip manufacturing, which has slowed down supply chains and product releases.

The commissioner’s comments followed a meeting with Dutch firm ASML, one of the semiconductor industry’s biggest suppliers.

Breton suggested that funding for the industry could come from the EU’s €800bn coronavirus recovery fund – 20pc of which is earmarked for digital investments.

The EU wants to account for 20pc of the world’s chip making by the end of this decade and has an ambitious plan to reduce Europe’s dependency on the US and Asia for supplies.

Breton has been in regular engagements with European companies such as NXP and ASML to potentially create a chipmaker alliance to ramp up Europe’s semiconductor industry and to address global shortages.

At the same time, Breton has aspirations of attracting the likes of Samsung and Intel to build more chip-making facilities in Europe. Intel is currently working on a $7bn expansion of its Leixlip chip facility in Ireland.

“We are not in a position where we are dying for [foreign chip makers] to come, we are in a position where we want to offer them the opportunity to come, to invest in our continent and to enhance the security of supply,” Breton said.

“Hopefully we will be able to move quickly, and when I say quickly, it’s a matter of months not years.”

However not everyone is convinced. In an interview with Bloomberg, an executive from German manufacturing Infineon, which has met with Breton, cast doubt on Europe’s ability to compete with the rest of the world on more advanced chip technologies.

Jonathan Keane is a freelance business and technology journalist based in Dublin