In the wake of global chip shortages that disrupted industries and economies, the United States and the European Union have taken decisive action. The U.S. CHIPS and Science Act of 2022 and the European Chips Act, enacted in close succession, represent an unprecedented level of public investment in the semiconductor industry. The shared goal is clear: to reduce dependency on foreign chip manufacturing, enhance supply chain resilience, and foster innovation in this critical sector.
Both Acts address the “catastrophic economic disruption” that could arise from over-reliance on chips fabricated in Taiwan, as highlighted by Arati Prabhakar, director of the White House Office of Science and Technology Policy. They also recognise the strategic challenge posed by a rising China and the need for substantial, sustained investments to catch up with the leaders in advanced semiconductor production.
While the two Chips Acts share broad similarities, they differ in key areas like state aid rules, funding sources, and tax incentives. The U.S. CHIPS Act introduces new federal funding and tax credits, whereas the EU Chips Act primarily redirects existing funds. The U.S. approach also incorporates state-level incentives, potentially leading to a “subsidy race” among states.
Implementation of both Acts is underway. The U.S. has made significant strides with major awards to companies like Intel, Micron Technology, and TSMC, while the EU has seen substantial investments from Intel, GlobalFoundries, and others.
Collaboration between the U.S. and EU is crucial for the success of these initiatives. Both Acts mandate international collaboration, acknowledging that neither region can achieve self-sufficiency in microelectronics. This collaborative spirit is evident in efforts to align export controls, establish a transparency mechanism for public support, and foster precompetitive R&D collaborations.
The newly established National Semiconductor Technology Center (NSTC) in the U.S. and the EU Chips Joint Undertaking (JU) are expected to play a pivotal role in coordinating research and development efforts. The authors of the CSIS report, A World of Chips Acts: The Future of U.S.-EU Semiconductor Collaboration, suggest that these bodies could identify technological challenges and ensure adequate research is directed towards overcoming them, much like the U.S. Sematech consortium did in the past.
Opportunities for cooperation abound, with potential areas of collaboration including advanced heterogeneous system integration, leading-edge nodes, FD-SOI technology, and wide bandgap semiconductors. The existing research infrastructure, including facilities like imec and the Albany Nanotech Complex, provides a strong foundation for collaborative efforts.
The U.S. and EU Chips Acts mark a historic shift in transatlantic industrial policy cooperation. While challenges undoubtedly lie ahead, the groundwork for productive collaboration is in place. The future of the semiconductor industry hinges on the success of these efforts, as the U.S. and EU strive to achieve strategic autonomy, enhance supply chain resilience, and maintain their competitive edge in this critical sector.
We encourage you to read the full version of this article from the Center for Strategic and International Studies
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