EU to propose European Chips Act to boost semiconductor ecosystem

15 Sep 2021

Image: European Parliament/Wikimedia Commons

Ursula von der Leyen said the bloc needs to ‘link together our world-class research, design and testing capacities’.

The European Commission will put forward a European Chips Act to coordinate research, supply and manufacturing of semiconductors, president Ursula von der Leyen has announced.

In her annual State of the Union address to the European Parliament today (15 September), von der Leyen said that “while global demand has exploded, Europe’s share across the entire value chain, from design to manufacturing capacity has shrunk”.

“We depend on state-of-the-art chips manufactured in Asia.”

To that end, the European Commission president announced planned measures to “ link together our world-class research, design and testing capacities” and “coordinate EU and national investment along the value chain”.

“The aim is to jointly create a state-of-the-art European chip ecosystem, including production. That ensures our security of supply and will develop new markets for groundbreaking European tech.”

Von der Leyen’s speech is the latest in a series of strategy announcements from EU leaders on the subject of chip manufacturing.

In March, European Commission vice-president Margrethe Vestager and commissioner Thierry Breton announced a 10-year plan to see the bloc produce 20pc of the world’s semiconductors. Breton went on in May to confirm that the EU was prepared to invest “significant” amounts in the effort.

The European Chips Act, if passed by the European Parliament, would be the first major legislative effort in the area.

Intel has been seeking significant EU financial support, as much as €8bn in subsidies, for bringing new semiconductor manufacturing capacity to Europe. The company is in negotiations with EU leaders over where to build two new chipmaking facilities, and Ireland is on the shortlist for this project.

Intel Ireland’s general manager, Eamonn Sinnott, said the announcement is a welcome step to reinvigorate the chip sector in the EU. “Intel has plans to invest billions of euros in new leading edge semiconductor manufacturing capacity in Europe,” he said.

Announcing the European Chips Act earlier today, Von der Leyen concluded: “Yes, this is a daunting task. And I know that some claim it cannot be done. But they said the same thing about Galileo 20 years ago.

“And look what happened. We got our act together. Today European satellites provide the navigation system for more than 2bn smartphones worldwide. We are world leaders. So let’s be bold again, this time with semiconductors.”

Ursula von der Leyen. Image: European Parliament/Wikimedia Commons (CC BY 2.0)

Updated, 9.45am, 16 September 2021: This article was updated to include a comment from Intel Ireland.

Jack Kennedy is a freelance journalist based in Dublin