William Malcolm

EU Plans ‘Chips Act’ To Promote Semiconductor Self Suffciency

The European Commission (EC) plans to create a new chip-making ecosystem. It wants to ensure the competitiveness and self-sufficiency of the 27-member bloc, because the global shortage of semiconductors has shown how dangerous it is to rely on suppliers from Asia and the United States. This was said in the European Parliament today by the President of the European Commission, Ursula von der Leyen. The lack of chips thus represents one of the greatest risks to the recovery of the EU economy from the consequences of a pandemic.

Last year, the United States issued a decree called CHIPS for America, which aims to strengthen the US’s ability to compete with Chinese technology.

Von der Leyen said the EC would present a new European regulation on chips, which aims to create a state-of-the-art European chip ecosystem, including chip production. This system should ensure security of supply and create a new market for breakthrough European technologies.

EU Internal Market Commissioner Thierry Breton pointed out that chips mean much more than just basic components for car, smartphone and video game manufacturers. “The race for the most advanced chips is a race for technological and industrial leadership,” he wrote on his blog. According to him, the European decree should include research, production capacities and international cooperation. The Union should also consider setting up a special European semiconductor fund.

Last year, the European Commission unveiled plans to invest a fifth of the recovery fund in digital projects. The fund has 750 billion euros (19 trillion CZK) at its disposal and is to help member countries with the consequences of a pandemic.

In her speech, Von der Leyen deplored the EU’s dependence on chips made in Asia and the EU’s reduction in the supply chain – from design to production capacity.

However, there are also obstacles to increasing European capacity in the chip market. These include, for example, the fact that the region does not have a direct connection to its own rare earth metals, as well as the reluctance of companies to make large investments if they cannot produce their plants at full capacity to increase returns, Reuters reported.