The EU and the USA are reacting to the ongoing supply bottlenecks in the supply of semiconductors by investing billions in building up their own production capacities.

For works like the planned Intel plant in Magdeburg, state aid in the billions is flowing.

The "EU Chips Act" is intended to mobilize around 45 billion euros in public funds by 2030.

The Americans are discussing their own “Chips Act” of a similar amount.

Henrik Kafsack

Business correspondent in Brussels.

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Both sides now want to at least prevent the transatlantic subsidy race from gaining momentum.

"A subsidy race must be prevented," says the concluding documents of the second meeting of the US-EU Trade and Technology Council (TTC), which was set up last summer, on Monday in Paris.

From now on, the EU and the USA want to disclose the amount, target and type of the subsidies and, as far as possible, also the recipient.

In addition, Europeans and Americans want to create an early warning mechanism in order to be able to identify and counteract impending bottlenecks in the supply of semiconductors at an early stage.

The responsible authorities should meet at least every two weeks to exchange information about the supply situation.

The transatlantic early warning mechanism is to be tested for two months and then possibly converted into a permanent instrument.

Neither side expects the chip supply situation to ease, despite the increase in chip supplies at the end of last year.

"We do not expect the supply/demand mismatch to decrease in the near future," the statement said.

Demand for rare earths is increasing

The supply of strategically important raw materials and products has otherwise played a central role in the body and the ten working groups in recent months, with which the EU and the United States want to better coordinate their trade policy after the conflicts of recent years.

The main concern is the supply of the so-called rare earths, which are required for the production of wind turbines, electric cars, hard drives, motors or tools, and solar panels.

The final document of the meeting states that the demand for both will increase rapidly by 2050 because they are needed for the decarbonization of industry and energy supply.

At the same time, the mining and recycling of rare earths are just as strongly concentrated in China as the production of solar panels.

Europeans and Americans therefore want to use state financial incentives to promote the recycling of raw materials, boost their own production and restart solar panel manufacturing plants that have been shut down in recent years.