The European Union is determined to put more effort into chip manufacturing. To make that possible, the EU plans to invest 43 billion euros. This was announced with the unveiling of the European Chips Act.
The European Chips Act should give Europe a better position in the chip market. “Chips are at the heart of the global technological race. Of course, they are also the foundation of our modern economies,” said Ursula von der Leyen, president of the European Commission.
Financial picture
Boosting chip production can only be done by investing. The EU plans to invest a total of 43 billion euros to support the Chips Act until 2030. The EU will scrape that amount together through a combination of public and private funding.
The EU spreads that amount over several investments. Among the investment items are investments in modern technologies, skills learning and microchip research.
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EU working on plan to make at least 20% of all chips in-house by 2030
Within the EU, the proposal was previously criticized for its cost. Yet investment is seen as the right way to ensure that European countries have chips available. Indeed, the European Chips Act provides the space to require companies receiving European money to give European customers priority in exceptional times.
The investment money will not only go to big players in the semiconductor industry. A separate pot is also provided to support scale-ups and SMEs. 2 billion euros would be set aside for this purpose, according to TechCrunch.
Essential to increase production
Currently, Europe is feasting on chip production from the East. The corona crisis only showed that this dependence can cause major problems. Cecilia Bonefeld-Dahl, general director of DIGITALEUROPE, cites that the past has already shown that new companies are hard to attract without investment: “The EU attracted only 3 percent of global investment for chip factories in 2020, and a lot of work is needed to get this figure up.”
The Chips Act should ensure that at least 20 percent of global chip production happens in Europe by 2030. Currently, Europe controls only 9 percent of this production, according to von der Leyen.
Deloitte came to the same conclusion as von der Leyen in a report. According to Deloitte, the semiconductor industry is as essential to our modern world as food, energy, logistics and other fundamentals. Therefore, a failure of this sector in the future should be avoided.
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