The European Parliament and Council struck a provisional agreement on regulation designed to increase semiconductor manufacturing in the region, as politicians target €43 billion of investment into the sector.

In a statement, the EU bodies explained compromises had been reached to move forward with the scheme outlined by the European Commission in early 2022. However, the so-called Chips Act still has several formal regulatory steps ahead before being implemented.

Rules set out in the Act are intended to create the conditions to increase Europe’s industrial base for semiconductors, with the ultimate aim of pushing the EU’s global market share to at least 20 per cent by 2030.

When the move was initially proposed the region’s share was 10 per cent.

The Act includes the Chips for Europe Initiative which is expected to attract €43 billion across public funding and private investments, including €3.3 billion from the EU budget.

Compromises reached to get the provisional agreement between the European Parliament and European Council include widening the scope of part of the act to cover the production of equipment used by semiconductor manufacturers.

Swedish Minister for Energy, Business and Industry Ebba Busch said the scheme will provide “a real revolution for Europe in the key sector of semiconductors,” adding the legislation puts the region “in the first line of cutting-edge technologies which are essential for our green and digital transitions”.

Alongside creating the framework for the funding, the Act includes various measures to push knowledge sharing across EU member states and from laboratories to manufacturers.

Europe’s attempts to up its chip manufacturing come as similar moves are being made in the US, with both regions attempting to reduce reliance on imports from Asia.