The European Parliament has approved the Chips Act. 43 billion euros will be mobilized to boost domestic microchip production and become more independent from other markets.
Industry councilor Thierry Breton is clearly satisfied, as are MEPs: Europe wants to regain lost ground and gain a better position in semiconductor production, which is important for future industry.
Smartphones, cars, heat pumps, household and medical devices all run on highly developed chips — and in the future they will no longer come almost exclusively from the US, South Korea and Taiwan. The corresponding law was passed by the European Parliament with a majority vote.
We are investing in the future, Breton promised: “So, it can be said that with the Chip Act we are helping to re-industrialize Europe’s semiconductor industry across the value chain.”
Target: 20% world market share
They do this for two reasons: they want to capture 20% of the world market – currently 9%. And manufacture the most advanced semiconductors in Europe. “Because it will determine tomorrow’s geopolitical and industrial power.”
Breton said the law, known as the Chip Act, was already in effect. Since the project was launched by the EU, public and private investments of more than €100 billion have been announced in this area.
The 15 member states reported 68 specific and strategically important financing projects amounting to 22 billion euros.
Europe must stand its ground
Breton added: “Given the new geopolitical situation, Europe must assert itself as an industrial and technological powerhouse.” As far as semiconductor production is concerned, this is a matter of competition. “But it’s also about security and technological sovereignty.”
The EU wants the law to simplify the approval process for chip factory construction and boost state aid. This should attract more manufacturers to Europe, but also foreign companies that want to produce in Germany: Intel in Magdeburg, Wolfspeed in Saarland, Infineon in Dresden and TSMC.
security supply
Contingency mechanisms, including early warning systems, should kick in when supplies run short again, as has been the case during the COVID-19 pandemic. The Commission could then direct companies to manufacture certain semiconductors or buy them centrally on behalf of member states.
According to the European Commission, the EU wants to increase public and private investment by a total of 43 billion euros. Member States shall receive a majority vote. Funding from the EU budget is relatively small.
Funds smaller companies too
Green MP Henrike Hahn emphasized: “We are now appealing to the EU semiconductor industry for funding of around 3.3 billion euros, but unfortunately not new funding.” Better support for European businesses.”
Hahn welcomed the future of funding not only large-scale projects, but also small and medium-sized companies and start-ups.
“The era when Europe invested only in research and outsourced manufacturing is over,” stressed Industry Commissioner Breton. “I made it very clear. The Chip Act allows for massive investment in a competitive European industry throughout the semiconductor manufacturing process.”
progress necessary
For Social Democrat Tiemo Wölken it is also important to produce more semiconductors in Europe. But he also cares about advancing product development. He was delighted to have found a regulation that would make it possible to design future chips in Europe. “This will make us less dependent on the supply chain, and we will no longer be just a workbench, but move towards technology leadership.”
From Volken’s perspective, the law is a nice boost to the much-needed catch-up race. Once ratified by member states, the Chip Act will come into force.