The European Commission (EC) outlined a major investment plan to boost the continent’s chip industry and reduce its reliance on supplies from US and Asia, in addition to ensuring added protection from future shortages.

In a statement, the EC explained its European Chips Act would bolster the region’s competitiveness by pooling the resources of European Union (EU) member states and other associated countries, while making €11 billion available to strengthen existing R&D, innovation and staff training around the sector.

The legislation will “mobilise more than €43 billion of public and private investments” for new development, in addition to setting measures to anticipate, prepare and respond to any supply chain disruptions, the EC explained.

Its longer-term goal is to enable the EU to double its current semiconductor market share to 20 per cent in 2030.

As part of the move, the EU also loosened funding access, easing rules allowing start-ups to develop factories and plants with state backing and through investors.

Game changer
The EC explained it is acting to boost its chip industry after the recent global shortage forced factory closures in a wide range of sectors from automotive to healthcare device manufacture.

It added production in some member states in the automotive sector decreased by a third in 2021 and highlighted the “extreme global dependency of the semiconductor value chain on a very limited number” of companies in a “complex geopolitical context”.

EC president Ursula von der Leyen said the European Chips Act “will be a game changer for the global competitiveness of Europe’s single market”.

Europe’s move mirrors a US pledge to allocate $52 billion to domestic semiconductor manufacturing, as it seeks to compete with China.