- Source: European Chips Act
The European Chips Act (ECA), also known as simply the Chips Act, is a legislative package to encourage semiconductor production in the European Union.
First announced in February 2022, the Commission has intended through the ECA to reclaim market share from the dominant Taiwan Semiconductor Manufacturing Company and reduce European exposure to supply chain risks. The ECA is part of a "Chips for Europe" investment plan which will span at least until 2030, and aims to establish Europe as "a leader in this market", according to president of the European Commission Ursula von der Leyen. The proposal has three "pillars":
research, development and innovation
a new state aid exemption covering semiconductor manufacturing, and
measures to monitor the supply chain and intervene if necessary.
As of 2022, Europe accounts for less than 10 percent of the production of semiconductors worldwide, and the Commission hopes to increase the figure to 20 percent with a 43 billion euro investment.
A political agreement was found in the Spring of 2023 and the Chips Act (Regulation (EU) 2023/1781 of the European Parliament and of the Council of 13 September 2023 establishing a framework of measures for strengthening Europe’s semiconductor ecosystem and amending Regulation (EU) 2021/694) was published in the Official Journal of the EU on 18 September 2023.
Criticism
The initiative's association with trade protectionism has been criticised by some writers.
Some have stated its €42 billion volume is comparatively small next to US efforts in their CHIPS and Science Act of $76 billion and efforts through the Inflation Reduction Act. It also does not solve the supply chain problems with raw materials for chip production.
Example projects
In October 2022, the EU supported the French-Italian company STMicroelectronics for the construction of a Silicon Carbide wafer plant in Catania with €293 million through the Recovery and Resilience Facility to be completed in 2026, and in line with the European Chips Act.
As of March 2023, Infineon, Germany's largest chip manufacturer, was planning to add two plants in Dresden for €5 billion and hoping for a subsidy of €1 billion.
See also
Digital Europe Programme
CHIPS and Science Act
Artificial Intelligence Cold War
Semiconductors in the EU
References
External links
European Commission Chips Act proposal announcement
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips Act) on EUR-Lex
Procedure 2022/0032/COD on EUR-Lex
Procedure 2022/0032/COD on ŒIL