European Chips Act to ensure EU semiconductor supply

The European Commission has proposed a comprehensive set of measures, known as the European Chips Act, to ensure the EU’s security of supply, resilience and technological leadership in semiconductor technologies and applications. Intended to reinvigorate semiconductor manufacturing and innovation, the Act calls to quadruple Europe’s production capacity by 2030 and lays out measures to avoid future supply chain disruptions.

Recent global semiconductors shortages forced factory closures in a wide range of sectors from cars to healthcare devices. This made evident the extreme global dependency of the semiconductor value chain on a very limited number of actors in a complex geopolitical context. It also illustrated the importance of semiconductors for European industry and society.

The European Chips Act thus marks a key step forward to reinforce Europe’s capacities in semiconductors as a precondition for its future competitiveness, as well as a matter of technological security. The Act is designed to build on the strengths of Europe’s semiconductor ecosystem — including world-leading research and technology organisations and networks as well as host of pioneering equipment manufacturers — and to address its weaknesses, supporting the EU’s aims to develop a thriving, resilient supply chain and set measures to prepare for, anticipate and respond to future disruptions. It is centred around five strategic objectives for the region:

1. Strengthen its research and technology leadership.
2. Build and reinforce its own capacity to innovate in the design, manufacturing and packaging of advanced chips, and turn them into manufactured products.
3. Put in place an adequate framework to substantially increase its production capacity by 2030.
4. Address the acute skills shortage, attract new talent, and support the emergence of a skilled workforce.
5. Develop an in-depth understanding of global semiconductor supply chains.

The Act will thus ensure that the EU has the necessary tools, skills and technological capabilities to become a leader in this field beyond research and technology in design, manufacturing and packaging of advanced chips, to secure its supply of semiconductors and to reduce its dependencies.

The unveiling of the European Chips Act is in line with similar initiatives to support semiconductor industry growth around the world. For example, in the United States, current legislation under consideration calls for US$52 billion in funding to increase domestic semiconductor production. Similarly, South Korea’s National Assembly approved rules and tax incentives to support and safeguard the local semiconductor industry, while China established 15 local semiconductor funds in a bid to supply 70% of its own chips needs by 2025.

SEMI, the global industry association representing the electronics manufacturing and design supply chain, has said it supports the European Chips Act as well as these other incentives to strengthen the resilience of the global semiconductor industry, and looks forward to contributing to it.

Image credit: ©stock.adobe.com/au/artjazz

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