Interrupted supply chains during the Coronavirus pandemic led to a global shortage of semiconductor chips. As a result factories closed in many sectors which in turn highlighted the significance of semiconductors for both European industry and society overall. In order to tackle these problems in the long turn the Commission recently proposed the European Chips Act which aims at making the European semiconductor industry more independent.
On 8 February 2022, the European Commission presented its proposal on a European Chips Act, which is to strengthen the EU’s resilience and technological leadership in respect of semiconductor technologies and applications. Whereas in the past funds were predominantly allocated to research, future measures shall allow more direct subsidies to strengthen the European semiconductor industry.
Reducing Europe’s dependencies
The Commission, together with EU Member States and international partners, expects to raise more than 43 billion Euro of private and public investments by 2030 to strengthen the European semiconductor industry. In order to reach Europe’s targets for the digital decade, its current global market share has to be doubled to 20 % by 2030. With the European Chips Act, the EU sets out to become a world leader in the advanced chips sector, thereby reducing the European industry's dependency on the import of semiconductors.
Pooling Europe’s resources and promoting innovations
The EU Commission’s set of measures – consisting of one Communication, two proposals for a Regulation and one Recommendation – includes the “Chips for Europe Initiative”. This initiative will pool resources from the Union, Member States and third countries that are associated with existing Union programme, as well as the private sector. To achieve this, the proposal provides the strategic reorientation of the existing Key Digital Technologies Joint Undertaking. In addition, the Commission will make available 11 billion Euro for pilot lines for prototyping, testing and experimentation of new devices for innovative real-life applications. Apart from a new framework to ensure security of supply, a Chips Fund will facilitate access to finance for start-ups to help them mature their innovations and attract investors. Furthermore, a coordination mechanism between the Commission and Member States shall monitor the supply of semiconductors, estimate demand, anticipate shortages and prevent bottlenecks.
Technological autonomy in Europe needs social involvement
All factions in the EU Parliament expressly welcomed the European Chips Act. The S&D Group regards the legislative package as an important step towards Europe’s increased technological autonomy. However, it is not enough to reduce Europe’s dependency on semiconductor also investments at European and national level have to be increased to reach small and medium-sized enterprises. The European Left is in favour of the regionally supported linking of science, industry and politics as well as for attaching subsidies to social and environmental targets. The EPP emphasised that the European Chips Act shall build on Europe’s scientific excellence to secure chips for the future, including the economic growth associated with it. This was particularly urgent against the background of the dependency of some European sectors on chips outside the EU.
From the point of view of AK, too, it is to be welcomed in principle to secure a position of independence at the European level, especially in key technologies, and to establish high-tech areas, know-how and production in Europe itself to a greater extent. However, a policy in this regard must be embedded in an overall industrial and structural policy in the sense of socio-ecological change. Focusing solely on the competitiveness of European companies would be a missed opportunity. Industrial policy needs social involvement, for example of workers and their representatives, in the sense of a socio-ecological shift.
What happens next?
European Parliament and Council will debate the Commission’s proposal on a European Chips Act within their institutions and develop a joint position. As soon as the regulation has been adopted by both EU institutions, it will be directly applicable across the EU.
AK EUROPA Position Paper: “A new Industrial strategy for Europe” and “An SME strategy for a sustainable and digital Europe”
A&W Blog: Chip, Chip, Hurra? Lehren der aktuellen Chipkrise
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