20 Apr 2023 -

EU’s semiconductor plan needs China’s market, claims Global Times

china Beijing

A report by the Global Times, a daily tabloid that is an arm of People’s Daily, the Communist Party’s mouthpiece, claims the EU needs China’s market and is playing a “dangerous game” amid the U.S. policy of sanctions and decoupling.

It writes, “Today the share of the EU in global production capacity is about 10 percent. By adopting the Chips Act, the EU aims to increase this share to 20 percent. One question worth considering is how to absorb newly-added capacity. The glory of some European electronics giants like Nokia and Ericsson seems to have faded compared with competitors in the US and Asia. Partly due to shrinking demand from Europe’s electronics industry, some European chipmakers have shifted manufacturing out and focus mainly on the semiconductor consumption market in the Asia-Pacific region. 

“As semiconductors become a new US tool of geopolitical competition, it’s understandable that the EU is trying to reinforce its capabilities in chip manufacturing, but an increase in production capacity means the EU should further strengthen, not reduce, its connection with the semiconductor consumption market in the Asia-Pacific. 

“China is the world’s largest semiconductor consumption market because of the size of its domestic electronics market and its status as production base for global electronics giants. At a time when European policymakers are aiming to promote semiconductor chip manufacturing, it is crystal clear they should strengthen economic and trade cooperation with China, because European semiconductor makers need China’s chip consumption market.”

The article comes in response to Thierry Breton, EU Internal-Market Commissioner’s statement, “You will always find Europe by your side when it comes to ensuring our common security in technology.”

“We fully agree with the objective of depriving China of the most advanced chips”, said Breton at the Centre for Strategic and International Studies. “We cannot allow China to access the most advanced technologies.”

He also urges a closer EU-US alignment on rare earths to ‘reduce collective reliance on Asia’.

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