The European Union Parliament and its member states reached an agreement on a landmark plan, the European Chips Act, to increase the bloc’s chip industry. This initiative is intended to enable the EU to compete with the U.S. and Asia in the tech sector and secure control over a significant component of the technology used in electronic products and devices worldwide. The new regulations aim to double the EU’s global market share in semiconductors to 20% by 2030, up from 10%.
“This agreement is of utmost importance for the green and digital transition while securing the EU’s resilience in turbulent times,” Ebba Busch, said Swedish energy minister to CNBC. “The new rules represent a real revolution for Europe in the key sector of semiconductors.”
The European Commission, the EU’s executive arm, announced that 6.2 billion euros will be invested in the EU Chips Act to spur industrialisation of advanced technologies, create competence centers for skill development, and ensure access to finance.
The European Commission will incentivize investments in manufacturing facilities and create a framework for integrated production facilities and open EU foundries to guarantee a secure supply. Additionally, member states will collaborate to monitor supply and anticipate any possible shortages. Following the initial announcement of the plan in 2019, the EU has obtained between 90 billion and 100 billion euros of public and private pledges for industrial implementation.
The US CHIPS and Science Act, which was officially adopted by President Joe Biden in August 2022, is similar in its objectives to the EU’s Chips Act. Both of these measures are meant to address the supply chain issues that the semiconductor industry has encountered in recent years, as well as the ongoing “chip war” between the US and China concerning the security implications of the Chinese government’s tight control over major silicon producers in the country.
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