The European Union is taking significant steps to strengthen its semiconductor industry, aiming to reduce reliance on US and Asian suppliers amid global supply chain disruptions. With the EU Chips Act, a 43 billion euro (US$47 billion) plan, the bloc intends to double its share of global chip output to 20% within a decade. As the EU countries and lawmakers prepare to meet on April 18 to finalize funding details, the approval of the Chips Act seems imminent. Here are the details…
EU aims to reduce reliance on US and Asian chips with €43bn Chips Act
The EU’s bold 43 billion euro (US$47 billion) plan, known as the EU Chips Act, is on track to gain approval from EU countries and lawmakers on April 18. The Act aims to strengthen the European semiconductor industry and reduce dependence on US and Asian chips, following global supply chain issues that hit European businesses across various sectors.
The legislation’s main objective is to double the EU’s share of global chip output to 20% within a decade. The announcement followed the US introducing its own Chips for America Act to compete with China’s technology sector. EU countries and lawmakers will meet at the European Parliament’s session in Strasbourg on April 18, where they are expected to agree on funding details for the Act.
Originally, the European Commission suggested funding only for advanced chip plants. However, EU governments and lawmakers have now expanded the scope to include the entire value chain, such as older chips and research and design facilities. One key driver for this expansion is Belgium-based IMEC, a leading innovation hub in nanoelectronics and digital technologies, with over 600 major industry players. Lawmakers see IMEC as a crucial reason for investing more in EU research and development.
The decision to support the entire value chain also eases concerns from smaller EU countries about being left out. For instance, Intel was attracted by the Chips Act and chose Germany for its new mega chip manufacturing complex. Similarly, Franco-Italian company STMicroelectronics has partnered with GlobalFoundries to build a 6.7 billion euro chip factory in France, backed by the French government.
As the EU Chips Act moves closer to approval, the European Union takes a significant step towards boosting its semiconductor industry and reducing reliance on external suppliers. The initiative’s success will be crucial in securing the EU’s position in the global technology landscape and addressing the ongoing semiconductor supply chain crisis.
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