The EU’s dreams of always having chips on hand by 2030 clash firmly with reality. Currently the Commission is considering the proposal and the cost issue is firmly holding them back from approving it.
The European Commission is currently reviewing the European Chips Act. That fancy plan is supposed to boost Europe’s infrastructure with chip factories and benefit EU countries’ access to chips.
Competitive bidding
Given the ongoing chip shortage, it is not surprising that the EU wants to invest in chip capacity. Production in many sectors is severely affected by the chip shortage, products are consequently not made or producers have to increase costs to obtain a chip. Covering all the shortages will not be possible this year either, according to forecasts.
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European Commission strongly criticizes actual cost of European Chips Act
With the European Chips Act, the EU wants to prevent such things from happening again in the future. The goal is to have at least 20 percent of global chip production in Europe by 2030. In this way, Europe will become a lot less dependent on the East, where the largest chip factories are currently located.
Dreams or reality?
The European Commission looks at things a lot more soberly. The problem lies with the overall cost of the proposal. This is because the EU is planning to allocate money for chip factories to invest in the EU.
Intel was among the first to commit to new factories in Europe, though the chip giant would pay $9.7 billion in subsidies in return. The EU does not mind investment, but the proposal then gives powers to keep components within Europe during a crisis.
Giving own member states priority over supplies, in turn, faces opposition from the Commission, the Financial Times knows. Margrethe Vestager, EU competition commissioner, told the Digital Europe forum yesterday that “self-sufficiency is not the goal.” According to Vestager, that would come at a cost of 240 billion euros to 320 billion euros.