Semiconductors Europe passes the Chips Act to increase production and face the crisis

The European Commission has passed the long-awaited Chips Act, a provision explicitly intended to increase the production of semiconductors in the Old Continent, to reduce dependence on Asia and avoid supply shortages that are penalizing numerous industrial sectors, primarily the automotive sector. “The College of Commissioners – announced during a press conference the president of the highest executive body of the EU, Ursula von der Leyen – today adopted the European Chips Act, which combines the investments, the regulatory framework and the strategic partnerships necessary to make the ‘Europe leader in such an important market ”.

The importance of the intervention. “The global demand for chips – added von der Leyen – is growing exponentially. Chips are at the heart of the global technological race, are the foundation of our modern economies and are essential for everyday goods. We have them in our smartphones,” in our washing machines and during the pandemic we needed them for life-saving fans. Chips are crucial in virtually every device. ” However, “the pandemic has also made the vulnerabilities of supply chains evident. The global shortage of semiconductors has slowed down our recovery: production lines have been interrupted, for example, in the automotive sector.” There are two priorities of the measure: in the in the short term, to increase “resilience to future crises by anticipating and avoiding interruptions in the suppy chain” and in the medium term “to make Europe an industrial leader in this strategic market”.

Goals and investments. To this end, the target has been set to reach 20% of global chip semiconductor production in the EU by 2030, compared to the current 9%. By virtue of the expected doubling of demand by the end of the decade, this means “quadrupling” the current production volumes. To achieve such a milestone, the commission aims to support a total of 43 billion euros in public and private investments. In detail, 13 billion euros of national and EU funds will be made available, which will be additional to the 30 billion already provided for by programs such as NextGenerationEU and Horizon Europe or by specific projects launched by individual countries. Furthermore, a whole series of priority intervention areas have been defined.

The areas of intervention. “The Chips Act – explained von der Leyen – focuses on 5 areas: the first is research”. In this context, the aim is to strengthen the current leadership also thanks to investments of 11 billion euros. The second focus is on the industrial transformation of excellence in research “to bridge the gap between laboratories and actual production in Europe.” The third point is perhaps the most important because it concerns production activities and any public aid authorized by Brussels. , notwithstanding current regulations, to allow the construction of new factories, such as those that Intel intends to build between Germany, France and Italy. “Europe – underlined the president of the commission – needs production plants that have a high cost: public support will be allowed for these plants. Obviously we will introduce severe conditions. “Finally, the focus is on collaborations with foreign partners because” no country can be entirely self-sufficient “, continued von der Leyen, referring explicitly to the United States, home of Intel, and to Japan. In any case, the effects of the Chips Act, especially in the industrial sector, will only be seen in a few years in the light of the investment cycles typical of the semiconductor sector: for a advanced factory a financial commitment of up to 10 billion euros is required, while it takes no less than three years to start up the first production activities and five to bring the plant up to speed.

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