EC Proposes Chips Act to Confront Semiconductor Shortages

The European Commission proposed a set of measures to ensure the EU's security of supply, resilience, and technological leadership in semiconductor technologies and applications. The European Chips Act will bolster Europe's competitiveness, resilience and help achieve both the digital and green transition.

The EU Chips Act will build on Europe's strengths - research and technology organizations and networks as well as equipment manufacturers - and address outstanding weaknesses, the EC said in a statement. “It will bring about a thriving semiconductor sector from research to production and a resilient supply chain. It will mobilize more than €43 billion of public and private investments and set measures to prevent, prepare, anticipate and swiftly respond to any future supply chains disruption, together with the Member States and our international partners. It will enable the EU to reach its ambition to double its current market share to 20% in 2030.“

The Chips for Europe Initiative will pool resources from the Union, the Member States, and third countries associated with the existing Union programs, as well as the private sector, through the enhanced “Chips Joint Undertaking“ resulting from the strategic reorientation of the existing Key Digital Technologies Joint Undertaking. €11 billion will be made available to strengthen existing research, development, and innovation, to ensure the deployment of advanced semi-conductor tools, pilot lines for prototyping, testing, and experimentation of new devices for innovative real-life applications, to train staff and to develop an in-depth understanding of the semi-conductor ecosystem and value chain.

The Commission also proposed an accompanying Recommendation to the Member States. It is a tool with immediate effect to enable the coordination mechanism between the Member States and the Commission to commence straight away. This will allow us from now on to discuss and decide on timely and proportionate crisis response measures.

“The European Chips Act will be a game-changer for the global competitiveness of Europe's single market. In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions. And in the mid-term, it will help make Europe an industrial leader in this strategic branch. With the European Chips Act, we are putting out the investments and the strategy. But the key to our success lies in Europe's innovators, our world-class researchers, in the people who have made our continent prosper through the decades,“ said EC President Ursula von der Leyen.

“Chips are necessary for the green and digital transition and the competitiveness of European industry. We should not rely on one country or one company to ensure the safety of supply. We must do more together - in research, innovation, design, production facilities - to ensure that Europe will be stronger as a key actor in the global value chain. It will also benefit our international partners. We will work with them to avoid future supply issues,“ added Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age.

Member States are encouraged to immediately start coordination efforts in line with the Recommendation to understand the current status state of the semiconductor value chain across the EU, to anticipate potential disturbances, and take corrective measures to overcome the current shortage until the Regulation is adopted. The European Parliament and the Member States will need to discuss the Commission's proposals on a European Chips Act in the ordinary legislative procedure. If adopted, the Regulation will be directly applicable across the EU.