The EU is getting nearer to blockbuster investments in home semiconductor chip manufacturing

According to EU data, numerous key technology sectors in the bloc are suffering from semiconductor chip supply shortages, mainly as a result of Europe’s reliance on imports from a limited number of companies and countries. To address this problem, the union wants to boost its domestic industry by implementing new legislation.

The European Parliament on Wednesday adopted its position on two bills: the Chips Act and the Chips Joint Undertaking.

On the chips law, MEPs approved the text presented by the industry committee and expressed their support for three main measures:

  1. Strengthen technological capacity and innovation and attract talent.
  2. Encouraging investment and increasing production capacity.
  3. Implementation of a crisis response mechanism allowing the Commission to monitor semiconductor supplies, assess risks and anticipate shortages.

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Commenting on the chip law, Rapporteur Dan Nica said it should establish Europe as a “key player” in the global semiconductor market. “Not only must the budget be commensurate with the challenges and funded by fresh money, but the EU should also be at the forefront of research and innovation, have a business-friendly environment, have a fast approval process and invest in a skilled workforce for the semiconductor sector,” he added added.

In a separate vote, MEPs also backed the Chips Joint Undertaking proposal, which implements the actions proposed under the Chips for Europe initiative and complements the Digital Europe and Horizon Europe programmes. The goal is to increase investment in research, development and innovation infrastructure to support large-scale capacity building.

“Microchips are an essential part of the EU’s digital and green transition, as well as our geopolitical agenda,” said Eva Maydell, rapporteur of the Chips Joint Undertaking. “We call for new funding that reflects the strategic importance of the European chips sector. Europe’s partners and competitors are also investing heavily in their semiconductor assets, capabilities and innovation.”

The European Parliament is now ready to start discussions with the Council on both draft laws. If the negotiations are successful, the chips law could be a turning point for Europe. With a budget of €43 billion and a target of covering 20% ​​of global supply by 2030, the law could help the EU strengthen its competitiveness and sovereignty in the sector.

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