EU looks to become a leader in semiconductors with European Chips Act

8 Feb 2022

Image: © Maxim_Kazmin/Stock.adobe.com

The new act proposes easing state aid rules to fund new developments and improve EU resilience to supply chain disruptions.

The European Commission has shared details of its strategy to make Europe a leader in the semiconductor sector.

The European Chips Act sets out a new framework to help the EU develop a strong semiconductor industry from research to production, along with a resilient supply chain. European Commission president Ursula von der Leyen said today (8 February) that the aim is to “make Europe a leader in this market, that is so important”.

Future Human

“Chips are crucial in almost every device,” she added. “But the pandemic has painfully exposed the vulnerability of chips’ supply chains.”

Plans for this act were first announced last September and it will see the EU ease state aid rules to support new “first-of-a-kind” semiconductor production facilities.

It will enable an additional €15bn in public and private investments by 2030, along with a new coordination mechanism between EU member states and the European Commission for monitoring the supply of semiconductors, estimating demand and anticipating shortages.

“The European Chips Act will be a game changer for the global competitiveness of Europe’s single market,” von der Leyen said. “In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions. And in the mid-term, it will help make Europe an industrial leader in this strategic branch.”

‘We should not rely on one country or one company to ensure safety of supply’
– MARGRETHE VESTAGER

The EU is looking to boost production amid a global chip shortage that has been a cause for alarm in many industries. A similar CHIPS for America Act is currently going through the US Congress, which would set aside $52bn in federal investments for domestic semiconductor research, design and manufacturing.

“Chips are necessary for the green and digital transition – and for the competitiveness of European industry,” European Commission vice-president Margrethe Vestager said today.

“We should not rely on one country or one company to ensure safety of supply. We must do more together – in research, innovation, design, production facilities – to ensure that Europe will be stronger as a key actor in the global value chain. It will also benefit our international partners. We will work with them to avoid future supply issues.”

Last March, Vestager and internal market commissioner Thierry Breton unveiled ambitions for Europe to manufacture one-fifth of the world’s semiconductors by 2030 and to build its first quantum computer. Breton went on in May to confirm that the EU was prepared to invest “significant” amounts in the effort.

The latest push comes as Intel seeks significant EU financial support to bring new semiconductor manufacturing capacity to Europe.

The European Parliament and member states will now discuss the Commission’s proposed European Chips Act. If passed, it will be the EU’s first major legislative effort in this area.

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Leigh Mc Gowran is a journalist with Silicon Republic

editorial@siliconrepublic.com