Trade Association, DIGITALEUROPE, published a policy paper on 25 March 2022, making a series of recommendations for the EU Chips Act. The association states that industry supports a “…strong, cohesive legal framework on chips…”. However, it believes that the framework conditions in the Act need expanding to cover other factors that determine private investment. These include energy prices, attracting talent, and the relocation of raw material and component suppliers outside the EU.
The DIGITALEUROPE policy paper draws on the views of its members, who represent digitally transforming industries in Europe – in particular those involved in the chip ecosystem. It states that the Act requires further work during the legislative process to ensure that it will act as “a catalyst for R&D and manufacturing semiconductor investments”.
Recommendations on the overall package
Looking at the overall Chips Act package, along with the expanded framework conditions the DIGITALEUROPE paper calls for greater clarity on the sources of the €43 billion budget. It also stresses the need for legal certainty and predictability for private investment. This is especially in relation to the eligibility criteria for European first-of-a-kind semiconductor facilities and “continued operating support” detailed in Pillar 2 of the Chips Act proposal.
Further, the paper recommends that Commission “swiftly” begins the work of the Industrial Alliance for Processors and Semiconductor Technologies to ensure alignment with Chips Act goals.
Industry needs and the role of the Chips JU
The paper continues with recommendations for each of the three pillars in the Chips Act proposal. In addressing Pillar 1 (Chips for Europe Initiative), it expresses its support for fostering native design capabilities, for Europe’s research centres, and for the focus on pilot lines.
However, the paper notes that industries such as automotive will continue to need mature, as well as advanced, technology nodes. And it calls for greater clarity on the development of, and third-party access to, the proposed virtual design platform and the pilot lines.
Other recommendations include a call for the Chips Joint Undertaking (CJU) to “… be industry-driven and focus on closing the gap between basic R&D at TRL 5 (and below) and deployment of chips in commercial applications in Europe,…” The CJU should embrace the chip value chain from design to embedded application and provide a continuous innovation flow for European microelectronics and IPCEIs.
Predictability for investment
In considering Pillar 2 (Security of Supply), the paper welcomes the Commission’s clarifications on state aid and its distinction between Integrated Production Facility (IPF) and Open EU Foundry (OEF). It also notes the unique challenges faced in semiconductor manufacturing and the importance of predictability for long-term investment and viability.
While stressing profitability and competitiveness, the paper adds that semiconductor projects in the EU face cost disadvantages compared to those in other locations worldwide.
Consistency and data protection in monitoring of supply
On Pillar 3 (Monitoring and Crisis Response), DIGITALEUROPE sees the need for a number of improvements. In particular, it calls for a “a single designated body at EU level where to report relevant information”. This is to prevent fragmentation and divergences should each Member State have its own arrangements for monitoring market supply.
The paper also explores issues related to information-gathering, priority-rated orders and common purchases, as well as data confidentiality and intellectual property. And it emphasises the importance of balancing “… greater visibility in the supply chain with the legitimate need of businesses to minimise any risk of exposing sensitive data.”
Finally, in the area of governance, the paper calls for increased industry involvement in the European Semiconductor Board. This should include membership seats with voting rights in the sub-groups for businesses designing, supplying, or using chip-related products.
The full DIGITALEUROPE paper with the complete set of detailed recommendations is available to download here.
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