Proposed EU Chips Act progresses through legislative process

20 Aug 2022

Strengthening the resilience of European supply chains is one of the priorities of the Czech Presidency of the Council of the EU (July – December 2022). This priority includes semiconductors. And the Czech Presidency is now reported to have set out a second compromise text of the proposed EU Chips Act.

Proposals for the EU Chips Act were first published on 8th February 2022. Since then, the proposals have been advancing through the EU’s legislative process. The French presidency (January – June 2022) made the Act one its priorities. This led to publication of a first compromise text to national delegations and a report on the most sensitive political issues.

The Act has also been discussed in EU’s Competitiveness Council, including in a public debate on 9th June 2020. In the European Parliament, the Committee on Industry, Research and Energy (ITRE) is the lead committee for the Act. And over the summer, both Thierry Breton, Commissioner for the Internal Market, and Margrethe Vestager, Commissioner for Competition, appeared before this Committee.

In addition, the ITRE Committee held a Public Hearing on the 14th July with presentations from industry experts. These included high-level representatives from ASML, the Institute for Quantum Control, Institute Forschungszentrum Jülich, Stiftung Neue Verantwortung and IMEC.

Second compromise text – reported new elements

Furthermore, Euractiv , in an article published on 6th July 2022 (“Czech EU presidency proposes compromise text on the Chips Act”) has reported that Czech Presidency has put forward a second compromise text. This new text is said to expand the scope of the EU Chips Act.

In particular, there is a stronger focus on sustainability and the climate impact of next-generation chips. Plus, the scope relating to quantum chips has been refined. According to Euractiv, the new proposal includes development of libraries for quantum chips, pilot lines for integrating quantum circuits and testing facilities for advanced quantum components.

Euractiv adds that the new text expands the definition of ‘innovation elements’ for ‘first of a kind’ production facilities. These include new technology nodes, substrate materials or innovative approaches in areas such as computing power, energy efficiency and integration of new functionality such as AI. More efficient processes and reduced environmental impact might also apply. Moreover, it appears that Czech Presidency may be calling for a longer-term approach to continued investment in the EU from ‘first of a kind’ facilities.

Next steps

Among the next steps in the legislative process, the ITRE Committee is set to publish a draft report in October 2022, with a final vote on the report in early 2023.

Meanwhile, Member States are being encouraged to start coordination efforts in line with the Recommendation on a ‘Common Union toolbox to address the semiconductor shortage crisis and an EU mechanism for monitoring the semiconductor ecosystem’.

In connection with this, the European Commission has released the findings of its Chips Survey (February to August 2022) on current and future demand for chips and wafers. The report indicates continued increasing demand for semiconductors, with the impact of the supply side crisis expected to last until 2024 at the least. Additionally, the survey shows that access to qualified labour and government regulations are key criteria in the selection of manufacturing sites.

In a final remark, the Commission says: “As the European Semiconductor Expert Group begin work on monitoring and mapping frameworks, the findings of the Chip Report can provide insights to help shape future initiatives.”


Further reading

Details of the ITRE Public Hearing session How a European Chips Act will put Europe back in the tech race’, including presentations from the industry experts:

Briefing on the proposed EU Chips Act prepared for the European Parliament: