The EU to strengthen semiconductor supply chain through the “Chips Act”

According to Techcrunch, the EU president trailed a forthcoming “European Chips Act” in a state of the union speech recently. Ursula von der Leyen suggested that gaining greater autonomy in chipmaking is now a key component of the EU’s overarching digital strategy.

Ursula von der Leyen pointed out that the global shortage of semiconductors, which has led to slowdowns in production for a range of products that rely on chips to drive data processing — from cars and trains to smartphones and other consumer electronics — as driving EU lawmakers’ concern about European capacity in this area.

“There is no digital without chips,” said von der Leyen. “While we speak, whole production lines are already working at reduced speed — despite growing demand — because of a shortage of semi-conductors.

“But while global demand has exploded, Europe’s share across the entire value chain, from design to manufacturing capacity has shrunk. We depend on state-of-the-art chips manufactured in Asia. So this is not just a matter of our competitiveness. This is also a matter of tech sovereignty. So let’s put all of our focus on it.”

The Chips Act will aim to link together the EU’s Semiconductor research, design and testing capacities, she said, calling for “coordination” between EU and national investments in this area to help boost the bloc’s self-sufficiency.

“The aim is to jointly create a state-of-the-art European chip ecosystem, including production. That ensures our security of supply and will develop new markets for ground-breaking European tech,” she added.

Thierry Breton, the EU’s internal market commissioner, said that the planned legislation will aim to support chip supply chain monitoring and resilience across design, production, packaging, equipment and suppliers (e.g. producers of wafers). The goal will be to support the development of European “mega fabs” that are able to produce high volumes of the most advanced (towards 2nm and below) and energy-efficient semiconductors.

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