Europe plans a Chips Act to boost semiconductor sovereignty

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The EU will use the law to advance greater flexibility and sovereignty in regional semiconductor supply chains.

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Block president in a state of the union overreacts to the upcoming ‘European Chips Act’ speech Today. Ursula von der Leyen suggested that achieving greater autonomy in chipmaking is now a key component of the EU-wide digital strategy.

It flagged a global shortage of semiconductors, which has led to a slowdown in production of a range of products that rely on chips to drive data processing – from cars and trains to smartphones and other consumer electronics – EU lawmakers said. As concerns about the European potential of the region.

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“There is no digital without chips,” von der Leyen said. “When we speak, entire production lines are already operating at low speeds – despite increasing demand – due to a shortage of semi-conductors.

“But while global demand has exploded, Europe’s share in the entire value chain, from design to manufacturing capacity, has shrunk. We rely on state-of-the-art chips manufactured in Asia. So it’s not just about our competition. It is also a matter of technical sovereignty. So let’s put all our attention on it.”

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The CHIPS Act aims to tie together the EU’s semiconductor research, design and testing capabilities, she said, calling for “coordination” between EU and national investment in this area to help boost the bloc’s self-reliance. for.

“The aim is to create a cutting-edge European chip ecosystem, including joint production. This ensures our security of supply and will develop new markets for unprecedented European technology,” he added.

The president of the European Union described the ambition to increase European chip capacity as a “difficult job”, but compared the mission to that of his Galileo satellite navigation system two decades earlier.

“Today European satellites provide the navigation system for more than 2 billion smartphones worldwide. We are the world leaders. So let’s go bold again, this time with semiconductors.”

In follow-up remarks, the EU’s internal market commissioner, Thierry Breton, shed a little more meat on the bones of the legislative plan – adding that the Commission seeks to integrate member state efforts into a “coherent” pan-EU semiconductor strategy and also a seeks to create a framework “to avoid the race for national public subsidies that fragment the single market”.

He said the aim would be to “set the conditions for protecting European interests and placing Europe firmly in the global geopolitical landscape”.

Per Breton, the CHIP Act will include three elements: first, a semiconductor research strategy aimed at building on work being done by institutions such as IMEC in Belgium, LETI/CEA in France and Fraunhofer in Germany.

“Building on the existing research partnership (KDT joint venture), we need to step up our game, and devise a strategy to take Europe’s research ambitions to the next level while preserving our strategic interests,” he added. needs to be done,” he said.

The second component will include a collective plan to boost European chipmaking capacity.

The planned legislation will aim to support monitoring and resilience of the chip supply chain in design, production, packaging, equipment and suppliers (such as makers of wafers), he said.

The goal will be to support the development of European “mega fabs” capable of producing the most advanced (2nm and below) and high quantities of energy-efficient semiconductors.

However the EU is not planning for a future when it can make all the chips it needs.

The final issue of the European Chip Act will create a framework for international cooperation and partnership.

“The idea is not to create everything automatically here in Europe. In addition to making our local production more flexible, we need to diversify our supply chains to reduce over-reliance on a single country or region. There needs to be a strategy,” Breton continued. “And while the European Union aims to remain the top global destination for foreign investment and we welcome foreign investment to help increase our production capacity, particularly in high-end technology, through the European Chips Act we are able to support Europe’s best-in-class services.” will also maintain the right conditions for the protection of the supply.”

“The US is now discussing a major investment under the American Chips Act designed to help build a US research center and open advanced production factories. The objective is clear: to increase the resilience of US semiconductor supply chains. for,” he said.

“Taiwan is positioning itself to ensure its primacy over semiconductor manufacturing. China is also trying to close the technology gap as it is constrained by export control rules to avoid technology transfer. Europe cannot lag behind. is and will not be.

In additional documents released today, the EU said the CHIPS Act would build on other digital initiatives already presented by the von der Leyen Commission – such as steps to incorporate the power of “gatekeepers” internet giants and increase accountability of platforms. (Digital Markets Act) and Digital Services Act); Regulate high-risk applications of AI (Artificial Intelligence Act); combating online disinformation (through a better practice code); and promote investment in regional digital infrastructure and skills.

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