European Union wants to be a major player in semiconductor market by 2030

The semiconductor market might soon have a new player besides the United States, Taiwan, and China. The Council of the European Union has approved its “Chips Act” bill that aims to make the continent a powerhouse in the semiconductor market by 2030.

The United States and China are currently the biggest players in the chip market. Both governments have approved multi-billion dollar plans to ramp up chip production and reinforce innovation. China is the biggest chip consumer in the world, supplying most of it from Taiwan, the same controversial island it claims to own. As chips are becoming more strategic, Europe is also entering the market.

The EU Chips Act is basically a roadmap for semiconductor development in the continent, attracting investments and amplifying R&D. This bill finally aims to protect Europe from any disruptions in the chips supply chain.

European Union is entering the semiconductor market to compete with China and the US

The Chips Act bill will mobilize €43 billion in public and private investment, which €3.3 billion of it comes from the EU budget. Europe hopes to increase its market share from 10% to at least 20% by 2030. The semiconductor market cap is also expected to reach $1 trillion in 2030.

“The Chips Act aims to reduce the EU’s vulnerabilities and dependencies on foreign actors. This will improve the EU’s security of supply, resilience, and technological sovereignty in the field of chips,” The European Council states.

Chips are today used in almost everything we use, including home appliances, cars, planes, smartphones, etc. The smartphone you’re now using contains nearly 160 chips. If you own a hybrid EV, roughly 3500 chips can also be found on it. As of 2020, Europe produced 10% of the world’s chips, and 27% of those went to the automotive market.

Taiwan currently produces over 60% of the world’s chips. Over 90% of the most advanced chips are also produced on this small island. The rising tensions between the United States and China over Taiwan have made countries focus on in-house chip production to reduce the impacts of a supply chain crisis in case of war.