The European Union has decided to invest €43 billion ($47 billion) in its semiconductor industry in an effort to significantly increase local chip production and introduce cutting-edge fabrication techniques to its member nations. The move aims to strengthen the local semiconductor supply chain and prevent chip shortages in crucial industries like the automotive.
“We have a deal on EU #ChipsAct,” Thierry Breton, European Commissioner on internal markets tweeted. “In a geopolitical context of de-risking, Europe is taking its destiny into its own hands. By mastering the most advanced semiconductors, EU will become an industrial powerhouse in markets of the future.”
Today, the European Union produces only about 10% of the world’s chips. Meanwhile, the majority of the chips used in the EU’s telecom, IT, and automotive sectors are produced outside of the continent, which presents difficulties for businesses like Ericsson, Volkswagen, and Nokia. The goal of the European Chips Act is to produce 20% (by value) more chips in the EU by 2030.
The fact that all cutting-edge processors, including those that power the fastest supercomputers in the world (including Finland’s Lumi, the most potent supercomputer in Europe), are produced in either the United States, Taiwan, or South Korea is one of the issues that the European Union is particularly concerned about. The purpose of the European Chips Act is to entice chip producers with cutting-edge process technologies to the union.
Leading producers won’t be the only ones to receive funding from the European Union
According to Reuters, while the European Union initially suggested funding only cutting-edge fabrication facilities, EU authorities and legislators have since broadened the scope to include the entire value chain, including established chip manufacturing and R&D facilities.
“The European vision to double our global market share by 2030 to 20%, and produce the most sophisticated and energy-efficient semiconductors in Europe, is already attracting substantial private investment,” Breton said in a statement published by Bloomberg. “Now we are mobilizing considerable public funding and the regulatory framework to turn this vision into reality.”
Leading chipmakers have already been drawn to EU member countries in recent years thanks to extensive efforts. Intel will continue to produce its most cutting-edge processors at its Ireland fabs while also constructing a brand-new production facility in Germany.
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