Semiconductor chips – Image © Andrew Barker – Fotolia
(BRUSSELS) – The European Chips Act came into force Thursday, setting in place a comprehensive set of measures to ensure the EU’s security of supply and technological leadership in semiconductor technologies.
From smartphones and cars, through critical applications and infrastructures for healthcare, energy, defence, communications and industrial automation, semiconductors are essential building blocks of digital and digitised products. They are also at the centre of strong geostrategic interests and the global technological race.
The European Chips Act is set to strengthen manufacturing activities in the EU, stimulate the European design ecosystem, and support scale-up and innovation across the whole value chain. Through the European Chips Act, the EU is aiming to double its current global market share to 20 per cent in 2030.
The European Chips Act consists of three main pillars. The first pillar – the Chips for Europe Initiative – facilitates the transfer of knowledge from ‘lab to fab’, bridging the gap between research and innovation and industrial activities and by promoting the industrialisation of innovative technologies by European businesses. The Chips for Europe Initiative will be primarily implemented by the Chips Joint Undertaking.
The Initiative will be supported by 3.3 billion of EU funds, which is expected to be matched by funds from Member States. This investment is to support activities such as the setting up of advanced pilot production lines to accelerate innovation and technology development, the development of a cloud-based design platform, the establishment of competence centres, the development of quantum chips, as well as the creation of a Chips Fund to facilitate access to debt financing and equity.
The second pillar of the European Chips Act incentivises public and private investments in manufacturing facilities for chipmakers and their suppliers. This creates a framework to ensure security of supply by attracting investments and enhancing production capacities in semiconductor manufacturing. To this end, it sets out a framework for Integrated Production Facilities and Open EU Foundries that are “first-of-a-kind” in the Union and contribute to the security of supply and to a resilient ecosystem in the Union interest. The Commission has already indicated at the time of the Chips Act proposal that State aid may be granted to first-of-a-kind facilities, in accordance with the Treaty on the functioning of the European Union.
In its third pillar, the European Chips Act has established a coordination mechanism between the Member States and the Commission for strengthening collaboration with and across Member States, monitoring the supply of semiconductors, estimating demand, anticipating shortages, and, if necessary, triggering the activation of a crisis stage. As a first step, a semiconductor alert system has been set up on 18 April 2023. It allows any stakeholder to report semiconductor supply chain disruptions.
European Chips Act enters into force - guide
