Regulation proposal
European Union regulation
Text with EEA relevance
TitleProposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips Act)
Journal referenceCELEX:52022PC0046
Preparative texts
Commission proposalCOM/2022/46 final
Proposed

The European Chips Act (ECA), also known as simply the Chips Act, is a legislative proposal by the European Commission to encourage semiconductor production in the European Union.[1][2][3][4]

First announced in February 2022, the Commission has intended through the ECA to reclaim market share from the dominant Taiwan Semiconductor Manufacturing Company.[1] 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.[2][5] The proposal has three "pillars":

  1. research, development and innovation
  2. a new state aid exemption covering semiconductor manufacturing, and
  3. measures to monitor the supply chain and intervene if necessary.[4]

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.[1]

Criticism

The initiative's association with trade protectionism has been criticised by some writers.[4]

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.[6]

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.[7]

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.[6]

See also

References

  1. 1 2 3 "Chip shortage: Has Europe's plan arrived too late?". BBC News. 2022-04-01. Archived from the original on 2022-08-12. Retrieved 2022-08-13.
  2. 1 2 "EU launches Chips Act industrial plan". POLITICO. 2022-02-08. Archived from the original on 2022-08-13. Retrieved 2022-08-13.
  3. ↑ "Chips Act unveiled: The (real) cost of making semiconductors". www.euractiv.com. 2022-02-22. Archived from the original on 2022-08-14. Retrieved 2022-08-13.
  4. 1 2 3 Niclas Poitiers Pauline Weil (2022-06-02). "Is the EU Chips Act the right approach?". Bruegel | The Brussels-based economic think tank. Archived from the original on 2022-08-13. Retrieved 2022-08-13.
  5. ↑ "European Chips Act". European Commission Directorate-General for Communication. Archived from the original on 11 January 2023. Retrieved 11 January 2023.
  6. 1 2 Eddy, Melissa (2023-03-27). "Germany Wants More Chip Makers, but They Won't Come Cheap". The New York Times. ISSN 0362-4331. Archived from the original on 2023-03-28. Retrieved 2023-03-28.
  7. ↑ Piovaccari, Giulio (2022-10-05). "Boosting EU chip supplies, STMicroelectronics plans new plant in Italy". Reuters. Retrieved 2023-05-16.


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