This Saturday, January 29, Thierry Breton, the European Commissioner for the Internal Market, confirmed that the European Union (EU) intends to quadruple its production of electronic chips by 2030.
Thus, the EU is preparing to grant billions of euros in state aid to semiconductor production sites, under certain conditions.
Facing the shortage
In a context of increasing digitization of activities, the global economy is currently experiencing a shortage of semiconductors.
In response to this, the European Commission wants to invest several tens of billions of euros.
The goal?
Quadruple the production of semiconductors in Europe by 2030.
Clearly, currently, Europe contributes 10% of the world market and the majority of the supply comes from producers outside the EU.
Thus, this new shift aims for a market share of 20% by 2030. And, given that the demand for chips will double between 2022 and 2030, Europe will have to quadruple its productivity force to succeed in this new challenge.
Financed in part by European funds, this project will materialize through a Chips Act.
"A major initiative for our industry and crucial from a geopolitical point of view", defines the Internal Market Commissioner Thierry Breton.
It will be a question of setting up a new framework, intended to “facilitate State aid for the production of semiconductors”, affirms the commissioner.
Promote next-generation chips
One of the main objectives of the future chip law is to attract investment for projects, called "mega-factories".
To obtain funding, these projects will have to be “the first of their kind” in Europe, agree to guarantee security of supply and commit to investing in cutting-edge technologies.
Thus, to benefit from the funds of the Chips Act, the beneficiary companies will have to present a plan of investment and innovation over five to ten years.
Also, this program will promote the production of chips of less than five nanometers, or even less than two nanometers.
That is, the production of chips that should prevail in the market in the future.
More chips and less dependency
Thanks to an export control tool, Europe also aims to impose new supply rules in the event of a crisis.
The aim of these new rules will be to support production in the European Union via public aid and to improve its “toolbox” to anticipate and better react to shortages.
Thus, in times of crisis, the government will be able to force manufacturers to concentrate their production on certain chips, for example.
One of the main objectives of this plan is therefore to make Europe less dependent on Asian production of semiconductors.
A dependency and a vulnerability whose effects have multiplied during the shortage of components.
“If our imports from Taiwan were to encounter a problem, European factories would run out of chips in just three or four weeks,” worries the European commissioner.
Concluding, Mr Breton said the value of the financial incentives being considered would be "proportional" to that of the US chip law.
In other words, around 46 billion euros.
The Chips Act should be officially unveiled on February 8.
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