The eagerly anticipated European Chips Act is now in effect, transforming the EU’s semiconductor landscape.
The European Chips Act implements a comprehensive set of measures to create robust supply chains and technological leadership in semiconductor technologies and applications.
Semiconductors are the quintessential component of a range of technologies, such as smartphones and cars, with vital applications in healthcare, energy, defence, communications, and industrial automation.
Increasingly essential in the digital economy, the European Chips Act will reinforce semiconductor manufacturing across the EU to help achieve the goal of doubling its current market share to 20% in 2030.
Speaking on the European Chips Act, Věra Jourová, Vice-President for Values and Transparency, commented: “The global race for leadership in chips is a fact, and Europe must secure her active part in it.
“In the EU, we have great talent and research, but we are missing out on linking those advantages with production and roll-out of the technology.
“The Chips Act will support investment and research facilities so Europe can become an innovation powerhouse with a strong stake in the global market.”
What will the European Chips Act do?
The European Chips Act comprises three main pillars that will revolutionise the EU’s semiconductor landscape.
The first pillar is the Chips for Europe Initiative, which will expedite the transfer of knowledge from laboratories to production, with the aim of ‘bridging the gap’ between research and industrial activities.
The initiative is supported by €3.3bn funding from the EU, which is believed to be matched by funds from Member States.
The Chips Joint Undertaking will implement the initiative, which will aim to:
- Create advanced pilot production lines;
- Develop a cloud-based design platform;
- Establish competence centres;
- Support the development of quantum chips; and
- Pioneer a Chips Fund to accelerate access to debt financing and equity.
Boosting investment
The second pillar of the European Chips Act focuses on incentivising public and private investments in semiconductor manufacturing facilities for chipmakers and suppliers.
This is facilitated through a framework for Integrated Production Facilities and Open EU Foundries that are ‘first-of-a-kind’ in the EU.
The European Chips Act outlines that State aid can be provided to these first-of-a-kind facilities in accordance with the Treaty on the functioning of the European Union to ultimately reinforce supply chains.
Increasing Member State collaboration
The third pillar of the Chips Act creates a ‘coordination mechanism’ among Member States and the EU Commission to strengthen collaboration.
This will help to monitor the development of semiconductors, quantify semiconductor demand, forecast potential shortages, and trigger the activation of a crisis stage if necessary.
In this scenario, a semiconductor alert system has been set up on 18 April 2023 that will enable any stakeholder to report any semiconductor supply chain issues.
