The ‘Chips Act’, aimed at boosting Europe’s semiconductor industry, has received the green light from The European Council.
The Act, about which Expert Investor has written extensively over the last year, will seek to help develop a European industrial base in the field of semiconductors, attract investment, promote research and innovation, and prepare the continent for any future chip-supply crisis. Following the Council’s approval today of the European Parliament’s position, the legislative act has been adopted.
The programme should mobilise €43bn in public and private investment – including €3.3bn from the EU budget – with the objective of doubling the EU’s global market share in semiconductors, from 10% now to at least 20% by 2030.
Héctor Gómez Hernández, Spanish minister for industry, trade and tourism, said: “With the Chips Act, Europe will be a frontrunner in the world semiconductors race. We can already see it in action – new production plants, new investments, new research projects – and, in the long run, this will also contribute to the renaissance of our industry and the reduction of our foreign dependencies.”
Three ‘pillars’
The Chips Act, which was originally passed back in April, is built on several ‘pillars’. The first of these – the Chips for Europe Initiative – is intended to reinforce Europe’s technological leadership, by facilitating the transfer of knowledge ‘from the lab to the fab’, bridging the gap between research and innovation and industrial activities and by promoting the industrialisation of innovative technologies by European businesses.
The second pillar will create a framework to ensure security of supply by attracting investments and enhancing production capacities in semiconductor manufacturing. With its third pillar, the European Chips Act will aim to establish a “coordination mechanism” between the member states and the Commission for strengthening collaboration with and across member states, monitoring the supply of semiconductors, estimating demand, anticipating shortages and, if necessary, triggering the activation of a “crisis stage”.
Expert Investor has written widely about the issue of semiconductors on the continent. In 2021, for example, we argued the economic recovery following the Covid pandemic could potentially be lost due to the shortage of chips. And March this year saw tech giant Intel reveal it would invest €80bn in the continent’s semiconductor value chain through building new plants, one of which is planned for the German city of Magdeburg.
The German economics ministry meanwhile announced this week it was looking at €20bn in subsidies for the country’s semiconductor industry – though details remain scant as to time periods or how this will be achieved.
