The ongoing supply bottlenecks in the supply of semiconductors are becoming more and more of a problem for the European economy.

Automobile manufacturers are cutting back on production, telecommunications companies are running out of routers, and “gamers” are not getting the latest game consoles.

Relaxation is not in sight.

The manufacturers' order books are full, their factories are working at full capacity, well into the coming year.

Global demand is simply greater than supply.

Economic researchers are revising their growth forecasts downwards, and chip manufacturers such as Intel's CEO, Pat Gelsinger, will be welcomed like a savior if they even hold out the prospect of investing in new production facilities in Europe.

Hendrik Kafsack

Business correspondent in Brussels.

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Against this background, Internal Market Commissioner Thierry Breton has been pushing for months to expand semiconductor production in Europe in order to remedy this, at least in the medium term. In March he announced the goal that the EU should manufacture at least a fifth of the world's most modern semiconductors itself by 2030. The share is currently below 10 percent.

Commission President Ursula von der Leyen now wants to go one step further.

In her “State of the Union Address” on Wednesday in Strasbourg, she announced a “European Semiconductor Act”.

"We want to create a high-class European chip ecosystem that includes production," said von der Leyen.

In this way, the EU could ensure the supply of chips and at the same time open up new markets for groundbreaking European technologies.

It is also about securing technological sovereignty, stressed the EU Commission President.

Project of particular European interest

Europe's share of the entire value chain has decreased, from product design to manufacturing capacity. The EU therefore depends on high-performance chips from Asia. Changing that is an “enormous challenge”, admitted von der Leyen. Some thought it was impossible. But that was the case with the idea of ​​building the European satellite navigation system Galileo 20 years ago. "So let's be brave again, this time with the semiconductors," said the CDU politician.

A central component of the “European Semiconductor Act” is to consist in coordinating the investments of the EU and the member states. There is also concern that Member States will outbid each other with subsidies when trying to get companies to invest in new chip factories. Without these, the construction of new factories is unlikely to be possible. In an interview with the FAZ, Gelsinger, for example, recently referred to the fact that Asians pay subsidies of up to 30 percent of the total investment amount.

In principle, such a dimension is also possible in the EU under certain conditions, despite the strict state aid rules, if the investment is classified as a “project of particular European interest”.

On Wednesday, Intel welcomed the EU push.

"This is in line with our joint efforts to strengthen the semiconductor sector in the EU again," said a company representative.

Invest in chip factories and "European semiconductor fund"

Breton spoke out on his blog on Wednesday in favor of accessing various European, national, regional and private cash pots to encourage investment in chip factories. In addition, the EU must examine the establishment of a “European semiconductor fund”, the Frenchman demanded. How exactly this should be financed is still open. It can be fed from various EU funds such as the Defense Fund and then used, similar to the Juncker Fund, to attract private investors, according to the Commission.

It is not least a question of promoting the construction of European “mega-fabs”, which could manufacture the most modern semiconductors with a size of 2 nanometers and even less in high volumes. Breton made it clear that the aim is not to bring the entire chip production back to Europe and only rely on European manufacturers. Foreign investments in the production of the most modern chips were welcome. The Internal Market Commissioner also emphasized that the European Commission should play an active role in monitoring the development of supply chains, foreseeing possible market distortions and intervening in case of doubt.