The European Parliament and the 27 member states reached an agreement on the legislation on Tuesday. The European Chips Act is one 43 billion euros a package of public and private investments aimed at securing supply chains, preventing future semiconductor shortages and encouraging investment in the industry.
The Chips Act sets out three main objectives.
- Building significant production capacity and innovation.
- Ensuring EU self-sufficiency.
- To prepare the EU for possible future supply crises.
The EU Chips Act allocates €6.2 billion to promote the industrialization of innovative technologies, create competence centers for skills development and ensure access to finance, according to the European Commission. in a statement. It will also encourage investment in manufacturing plants and provide a framework for integrated manufacturing plants. The Member States will also coordinate the monitoring of the supply and the prediction of possible shortages, the Commission said.
Since the plan was first announced last year, the EU has already attracted between €90 and €100 billion in public and private investment commitments.
Chips are practically the brains of electronic devices, used in everything from smartphones to game consoles. However, semiconductors and the supply chain behind them, mainly centered in East Asia, have become a sensitive issue for governments around the world after global shortages led to supply problems for major car and electronics manufacturers. The pandemic has highlighted an over-reliance on Taiwanese and Chinese semiconductor manufacturers, which has become pregnant with rising tensions between China and Taiwan (especially since Taiwanese semiconductor giant TSMC is by far the largest chip maker).
The EU therefore set itself the goal of building an independent chip industry, but at the same time, the bloc realized that it cannot achieve this alone – there are no European companies capable of producing cutting-edge chips. That is why the EU wants to attract foreign companies to its market, an effort that seems to be succeeding, since Intel has also decided to make significant investments in the EU, according to the company’s statement, in the amount of 33 billion euros.
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