European Commission announces European Chips Act

08 Feb 2022

The European Commission has announced its widely anticipated European Chips Act. Introducing it, Commission President Ursula von der Leyen, said that it has two key aims:

  • to increase Europe’s resilience to future crises by anticipating and avoiding supply chain disruption
  • to become an industry leader in the medium-term, with a 20% share of the global semiconductor market by 2030.

These goals will be backed up with over 43 billion euros of public and private investments. This funding includes over 13 billion euros of extra investment, on top of the 30 billion euros earmarked for the industry through programmes such as Horizon Europe and the NextGenerationEU recovery plan.

The Act’s measures will ensure the EU’s security of supply, resilience and technological leadership in semiconductor technologies and applications. Further, it will support European ambitions for its industrial competitiveness and the green and digital transitions.

Supply chain security

Speaking about the Act, Ursula von der Leyen and Margrethe Vestager, EU Commissioner for Competition, noted that the COVID pandemic and the current semiconductor supply shortage had highlighted vulnerabilities and dependencies in the European supply chains.

The Chips Act will mobilise its investment funds “to prevent, prepare, anticipate and swiftly respond to any future supply chains disruption, together with the Member States and our international partners.”

Building leadership on strengths

At the same time, the Chips Act will build on Europe’s strengths, including its world-leading capabilities in research, materials and equipment. The goal is to create a thriving semiconductor sector from research to production. Through the Act, the EU aims to ensure Europe has the tools, skills and technological capabilities to lead – not only in research, but also in the design, manufacturing and packaging of advanced chips.

Three key measures

Turning to implementation, the European Commission announced three measures.

First is a Chips for Europe initiative which will bring together existing resources from European, public, private, national and international programmes via a strategic reorientation of the Key Digital Technologies Joint Undertaking (KDT JU) into a new Chips Joint Undertaking. Up to 11 billion euros will be available for advanced semiconductor tools; pilot lines for prototyping, testing and experimentation of innovative devices for real-life applications; skills training and ecosystem development.

Secondly, there will be a new framework to attract investment and enhance production capacities in Europe to ensure the security of supply. And start-ups and SMEs will be helped to find investors and finance through a Chips Fund and an equity investment facility under Invest EU.

Thirdly, the EU will put in place a mechanism between the Members States and the Commission to monitor the supply chain, anticipate bottlenecks and allow the EU to take action via an ‘emergency toolbox’. The Commission has already proposed a Recommendation to the Members States, which would start a coordination mechanism immediately.

Concluding her announcement, Ursula von der Leyen said that Europe was “the home of the first industrial revolution, and it could be the home of the next one too”.

Read more here:

For more information, read the following: