The European Chips Act will be proposed in early February, announced European Commission President Ursula von der Leyen speaking at the World Economic Forum on 19th January. This is earlier than the originally planned date of Q2 2022.
“There is no digital without chips,” began Ms von der Leyen. And Europe’s need for chips will double in the next decade. “Which is why we need to radically raise Europe’s game on the development, production and use of this key technology,” she continued.
Ms von der Leyen acknowledged that Europe is strong in specific areas such as design of components for power electronics, and chips for automotive and manufacturing. Similarly, Europe has world-class capacities in research, and in materials and semiconductor manufacturing equipment.
Need for speed
Nonetheless, Europe currently has only a 10% market share in global semiconductors. Most its supplies come from a few producers outside Europe. This is a “dependency and uncertainty we simply cannot afford,” Ms von der Leyen insisted.
“By 2030, 20% of the world’s microchips production should be in Europe,” she stated. Given that world production will double in this timeframe, Europe’s production must quadruple. Hence, the need to move rapidly with the European Chips Act.
Five priorities
The new Act will help make progress in five key areas, said Ms von der Leyen:
- Strengthening Europe’s research and innovation capacity
- Ensuring European leadership in design and manufacturing
- Adapting state aid rules to allow public support (for the first time) for European, first-of-a-kind production facilities for the benefit of all of Europe
- Improving Europe’s ability to anticipate and respond to shortages, and improving security of supply
- Supporting smaller, innovative companies with skills, industrial partnerships and equity finance
Europe remains open and connected
Ms von der Leyen stressed that Europe will work to keep world markets open and connected, while tackling the bottlenecks limiting its own growth. The goal is to become stronger across the whole value chain. In doing so, Europe will promote diversification among like-minded partners. “We will create more balanced interdependencies and build supply chains we can trust by avoiding single points of failure,” she concluded.
Video exert from President von der Leyen’s speech (section on semiconductors) here:
Full speech (section on semiconductors starts at 09:32) here.
More background on the legislative process here.