© Franz1212/Dreamstime
Production Of Circuit Microchip Silicon Wafer Semiconductor Computer Components Circuitboard © Franz1212 Dreamstime

EU Eyes 'Chips Act' to Cope with Semiconductor Shortage

Sept. 15, 2021
Concerned with its capacity to produce tech, the EU aims to produce 20% of the world's semiconductor production by 2030.

Brussels announced Wednesday it is drafting legislation to ensure EU "tech sovereignty" in the face of a global shortage of semiconductors that threatens to hobble its leap towards a digital future.

EU chief Ursula von der Leyen said the European Commission will soon propose a "European Chips Act" that will help underpin the bloc's ambition to become a digital powerhouse.

"Digital is the make-or-break issue," she told the European Parliament in her annual State of the European Union address.

EU countries plan to spend collectively more than 160 billion euros ($190 billion) to boost that sector in coming years -- some 20% of the bloc's 800-billion-euro COVID recovery fund.

The EU's internal market commissioner, Thierry Breton, said in a statement that the legislation was a key response to the chronic chip shortage, which is curtailing production of cars, computers, smartphones, game consoles and other semiconductor-reliant goods.

Much of the problem is the sudden economic surge that followed the deep and abrupt downturn caused by the Covid-19 pandemic, but a U.S.-China trade war is also a factor.

"While global demand has exploded, Europe's share across the entire value chain, from design to manufacturing capacity has shrunk," von der Leyen said, highlighting the EU's current reliance on chips made in Asia.

"This is not just a matter of our competitiveness. This is also a matter of tech sovereignty," she said.

Von der Leyen said the aim of the European Chips Act would be build up a "state-of-the-art European chip ecosystem, including production" which would ensure supply.

The EU wants to be the source of 20% of the world's semiconductor production by the end of the decade, according to a roadmap presented in March by the European Commission.

Breton said the proposed legislation should provide tools to make sure EU chip production was monitored and resilient, and contribute to the construction of "mega fabs", or huge fabrication plants turning out the most advanced semiconductors.

But he said it should also go beyond the supply chain by boosting European research in the sector and foster international cooperation and partnerships.

"The idea is not to produce everything on our own here in Europe. In addition to making our local production more resilient, we need to design a strategy to diversify our supply chains in order to decrease overdependence on a single country or region," he said.

Breton added that the idea of setting up a dedicated European Semiconductor Fund should be explored.

"With the European Chips Act, our tech sovereignty is within reach," he said.

Popular Sponsored Recommendations

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Secure end-to-end traceability and digitalization. Ensuring security with a specific data model.

July 11, 2023
A secure end-to-end traceability answers key questions. Is the device genuine or counterfeit? Are the designs intact and untampered? How to track origins and destinations? Explore...

Turning Your Frontline Workforce into a Competitive Advantage: A Comprehensive Guide

Sept. 19, 2023
In this guide, we'll explore how manufacturers are using digital technologies to preserve the bottom line and maintain growth by enabling and empowering their #1 asset - their...

Smarter Savings for Manufacturers - Guide

Sept. 12, 2023
Enhance your service experiences and boost revenue while reducing costs. Learn how one platform can help your business be more agile and productive in today's market.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!