EU in €43bn move to secure semiconductor supplies

Ursula von der Leyen

The European Commission has proposed a comprehensive set of measures to ensure the EU’s security of “supply, resilience and technological leadership in semiconductor technologies and applications.”

The Commission said the European Chips Act will “mobilise more than €43 billion euros of public and private investments and set measures to prevent, prepare, anticipate and swiftly respond to any future supply chains disruption, together with member states and our international partners.”

It said the move will enable the EU to reach its ambition to double its current market share of semiconductors to 20% in 2030.

The European Chips Act will require approval from EU countries and EU lawmakers before it can become law — and it would allow the Commission to demand that companies deliver key chips during a crisis.

Commission President Ursula von der Leyen said the EU will ease its state aid rules for innovative chip factories, Reuters reported.

“Recent global semiconductors shortages forced factory closures in a wide range of sectors from cars to healthcare devices,” said the Commission.

“In the car sector, for example, production in some member states decreased by one third in 2021.

“This made more evident the extreme global dependency of the semiconductor value chain on a very limited number of actors in a complex geopolitical context.

“But it also illustrated the importance of semiconductors for the entire European industry and society.”

The Commission said a Chips for Europe Initiative will pool resources from the Union, member states and third countries associated with the existing Union programmes.

€11 billion will be made available to strengthen existing research, development and innovation.

President von der Leyen said: “The European Chips Act will be a game changer for the global competitiveness of Europe’s single market.

“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.

“With the European Chips Act, we are putting out the investments and the strategy.

“But the key to our success lies in Europe’s innovators, our world-class researchers, in the people who have made our continent prosper through the decades.”

Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, added: “Chips are necessary for the green and digital transition – and for the competitiveness of European industry.

“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.”

Thierry Breton, Commissioner for Internal Market, elaborated: “Without chips, no digital transition, no green transition, no technological leadership.

“Securing the supply in the most advanced chips has become an economic and geopolitical priority.

“Our objectives are high: doubling our global market share by 2030 to 20%, and producing the most sophisticated and energy-efficient semiconductors in Europe.

“With the EU Chips Act we will strengthen our research excellence and help it move from lab to fab – from the laboratory to manufacturing.

“We are mobilising considerable public funding which is already attracting substantial private investment.

“And we are putting everything in place to secure the entire supply chain and avoid future shocks to our economy like we are seeing with the current supply shortage in chips.

“By investing in lead markets of the future and rebalancing global supply chains, we will allow European industry to remain competitive, generate quality jobs, and cater for growing global demand.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.