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After the United States’ initiative to boost its semiconductor manufacturing capabilities and reduce its reliance on Taiwan, the EU is also taking significant steps to strengthen its semiconductor industry with its own Chips Act.
According to a report from the South China Morning Post, the European Union plans to reduce its dependence on US and Asian suppliers with a $47 billion investment, aiming to increase the EU’s share of global chip output to 20% within a decade.
While initially, the European Commission proposed funding only for advanced chip plants, in the wake of the global chip shortage, the EU governments and lawmakers further expanded the scope to include the entire value chain, including older chips and research and design facilities.
Additionally, this expansion is also in response to the growing importance of Belgium-based IMEC, a leading innovation hub in nanoelectronics and digital technologies. With over 600 major industry players, lawmakers see IMEC as a significant reason to invest more in research and development.
Funding negotiations and potential deal clinching
EU countries and lawmakers will meet at the European Parliament’s monthly session in Strasbourg on April 18th to negotiate the funding details for the Act. And, according to sources familiar with the matter, the likelihood of clinching a deal is high. However, discussions so far have pointed to a €400 million shortfall, but the EU executive has reportedly secured the bulk of the funds.
Moreover, the EU’s move to provide funding for the entire value chain will also address the complaints of smaller EU countries about being left out after Intel and STMicroelectronics announced plans to build chip manufacturing facilities in Germany and France, respectively.
The EU Chips Act is a significant step towards boosting the European semiconductor industry and its success will be crucial in securing the EU’s position in the global technology landscape and reducing its reliance on Taiwan and the United States.
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