The European Chips Act aims to help the bloc compete with the US and Asia technologically, as well as ensure control over the industry.

Last February, the European Commission approved the law, and on April 18, 2023, it was agreed in advance by the EU Parliament and 27 member states. They said in a statement that the new rules aim to double the EU’s share of the global semiconductor market from 10% to 20% by 2030.

What is the document about?

The European Chip Law will attract €43 billion of public and private investment and is aimed at securing supply chains, preventing future semiconductor shortages and attracting investment into the industry.

The main goals of the law:

• Creating great potential and innovation
• Belief in the self-sufficiency of the EU
• Preparing the EU for possible future supply crises

According to the statement of the European Commission, 6.2 billion euros of public funds are provided to promote the industrialization of innovative technologies, create competence centers for the development of skills and ensure access to financing. This, in turn, will stimulate investment in production facilities and provide a basis for the construction of specialized factories in the EU.

Member states will also coordinate monitoring supplies and predicting any shortages, the commission said. It is reported that since the bill was first announced last year, investment plans for industrial implementation have already reached €90-100 billion in public and private commitments.

Why is this important?

Microcircuits are practically the “brain” of electrical devices. They are used in everything from smartphones and game consoles to cars and refrigerators.

The semiconductor industry and supply chains are largely concentrated in East Asia and have become a hot-button issue for world governments after a global shortage led to supply problems for major automakers and electronics manufacturers. And the Covid-19 pandemic has further exposed their over-reliance on semiconductor component manufacturers from Taiwan and China (Taiwan’s TSMC is the largest chip manufacturer today).

Europe is now trying to control more of its supply chains to reduce dependence on foreign market players. The move is also part of the EU’s initiative to achieve so-called “digital sovereignty”.

God, what a beauty! Who did it?

I!

Help from the side

At the same time, the bloc realizes that it will not be able to achieve such an increase in production by itself (since European chip manufacturers actually do not exist) and plans to attract foreign companies, in particular the American Intel, which is increasing its investments and has allocated more than 33 billion euros for the development of production. chips in Europe (British chipmakers threatened to leave the country if the UK government did not provide such support).

Europe, however, is the home of titanium in semiconductors – Dutch company ASML. Its ultraviolet lithographic machines are used to engrave microscopic elements on silicon wafers. However, the company does not manufacture its own microcircuits.

• In August 2022, US President Joe Biden signed the CHIPS and Science Act, which allocates $280 billion for the development of the American IT industry. Among other things, the document provides funding in the amount of $52 billion to stimulate the production of semiconductors in the United States.

Source: CNBC