The legislative process towards the adoption of the EU Chips Act took an important step forward on 24 January 2023. ITRE (the European Parliament’s Industry, Research and Energy Committee) voted to accept its Rapporteur’s Report on the Commission’s proposed ‘Chips Act’ regulation. The Committee also voted by a large majority to adopt its draft report on the creation of the Chips Joint Undertaking.
The ITRE Report on the Chips Act was drawn up by Rapporteur MEP Dan Nica. In this role, he … “welcomes the Commission’s proposal for a Chips Act that aims at strengthening Europe’s semiconductor ecosystem…” and EU ambitions to “become an industrial leader in the chips market of the future.”
Having adopted the report, the committee also gave its mandate to move to the next stage in the legislative process – inter-institutional negotiations (EU Council, Parliament and Commission). The final decision to proceed will be taken at a plenary session of Parliament on 13-16 February 2023. At the same time, Parliament will vote on the Chips Joint undertaking proposal (see more details on this below).
Importance of sufficient funding
ITRE is the Parliament’s lead Committee on the Chips Act. As such it proposed many amendments to the Commission’s original text in its Report. Some reflect small wording issues. Others underscore wider concerns.
Among these, the Rapporteur stresses “funding needs” which “…should be taken into consideration in the mid-term review of the MFF, with a view to ensuring the stability, coherence, ambition and long-term financing of the initiative.”
Further individual amendments proposed by the MEPs included requests that funding for the ‘Chips for Europe Initiative’ should not detrimentally impact other RD&I activities under Horizon Europe.
In a commentary following the vote, the European Parliament’s EPP group emphasised MEPs’ objectives in this area saying: “The Parliament is calling for fresh funding that reflects the strategic importance of Europe’s Chips sector.”
Call for clarity on ‘first of a kind’ and pilot lines
The Report and the proposed amendments to the Commission’s text also indicate a desire for greater clarity over key terms. For instance, MEPs suggested broadening the definition of ‘first-of-a-kind’ facilities, going beyond semiconductor manufacturing capabilities to “manufacturing capabilities in material or equipment used in semiconductor manufacturing”.
Regarding pilot lines, one amendment proposed “… guaranteeing fair and equal access to new pilot lines by all interested undertakings of the Union semiconductor sector.”
Wide-ranging amendments
The Report also proposes new articles, such as one calling for greater international cooperation, while recognizing that the industry value chain “… is highly complex and closely intertwined”. At the same time, the MEPs stress the need for stronger protection of IP against fraud and theft, along with improved commercialization to cover the costs of R&D.
On security of supply and global supply chains (Pillars 2 and 3), the Report offers extensive amendments and alternative solutions to the Commission’s original proposals. Among these were changes that would strengthen the protection of company data supplied to the Commission under its plans to anticipate potential bottlenecks in the market.
Elsewhere, the Report ranges over topics from the importance of quantum and next generation technologies to the definition of ECICs (European Chips Infrastructure Consortium). Skill development featured prominently, including the creation of a network of competence centres.
Draft Report on the Chips Joint Undertaking
The second Report voted on by ITRE on 24 January concerned the amendment to the Horizon Europe Joint Undertaking regulation to allow for the creation a Chips Joint Undertaking (JU).
In her comments, the Report’s Rapporteur Eva Maydell stated that: “The Chips for Europe initiative and the Chips Joint Undertaking must ensure that the R&D&I community strengthens our industry and services, and SMEs, start-ups and scale-ups across Europe.” And like Dan Nica, she stressed the need for new money, financial continuity and planning for the transition to the next EU long-term budget (MFF).
Work programme and access to facilities
Turning to the operation of the Chips JU, she insisted that “… a detailed programme and guidance is provided as soon as possible regarding the functioning of the Virtual Design Platform, Design Libraries, Competence Centres, and Pilot Lines open for research, testing, experimentation, and validation of new device concepts.”
Moreover: “While the Pilot Lines may seek to address different technologies, operating them under a single structure should seek to maximise the synergies between them and maximise the potential benefits. The Chips Joint Undertaking should seek to close the gap between R&D&I and deploying chips production and application in Europe.”
‘Exceptional’ evaluation
In addition, Ms Maydell called for an “exceptional” work programme evaluation to be delivered to the Parliament and the Council within 18 months of the Chip JU coming into force.
Broad range of amendments
As with the Report on the Chips Act itself, the draft Report on the Chips JU also focused on skills (with several calls for gender balance), and further amendments on issues from improved IP protection to sustainability.
In the EPP commentary following the ITRE votes, Eva Maydell concluded: “We’ve made a number of changes to the original Commission proposal which make this law more practical and focused on supporting the sector to grow. We also increased flexibility and inclusivity to ensure more facilities and Member States, both big and small, can benefit from the Chips Act.”
Further reading
The European Parliament Press Release gives more background.
Comments from the EPP Group in the European Parliament.