EU Strikes Agreement to Increase Chip Manufacturing and Decrease Reliance on Asian Providers
The European Parliament and EU member states have reached an agreement on how to increase the supply of semiconductors within Europe, in order to reduce its reliance on suppliers from Asia.
The coronavirus pandemic caused significant shortages and supply chain shocks across the globe, leading the EU to prioritise local chip production.
Although Asian firms, especially those in China and Taiwan, currently dominate semiconductor manufacture and export, under the agreement the EU will double its current global market share to 20% by 2030 and mobilise more than 43 billion euros ($47.2 billion) in public and private investments.
Production will need to quadruple to meet this target. The legislative text, known as the Chips Act, is also part of the bloc’s bid to reduce its vulnerability to geopolitical shocks, such as the war in Ukraine.
The EU’s executive arm has published two proposals to encourage Europe to produce more clean technology, including critical raw materials for manufacturing batteries for electric vehicles.
The European Union (EU) is set to double its global market share in semiconductor production and export from its current 10% to 20% by the year 2030. This comes as part of a new agreement known as the Chips Act, which aims to reduce the EU’s vulnerability to geopolitical shocks such as the ongoing conflict in Ukraine.
Currently, Asian firms, particularly those in China and Taiwan, dominate the semiconductor market. However, with the implementation of the Chips Act, the EU will mobilise over 43 billion euros ($47.2 billion) in public and private investments to support the quadrupling of production needed to achieve this target.
Apart from reducing vulnerability to geopolitical shocks, the Chips Act is also part of the EU’s broader goal of producing more clean technology, including critical raw materials needed for manufacturing batteries for electric vehicles. The EU’s executive arm has published two proposals to encourage Europe to produce more of these materials, which are vital for achieving the bloc’s ambitious climate goals.
The new agreement will not only boost the EU’s economic competitiveness in the semiconductor market but also create new jobs in the region. It will also help reduce the EU’s reliance on imports from Asia, which have been a source of concern for policymakers.
The Chips Act is a significant step towards establishing the EU as a major player in the global semiconductor market. The EU’s commitment to investing in clean technology and reducing its reliance on imports from Asia is commendable, and it shows the bloc’s determination to achieve its climate goals while also promoting economic growth.
In conclusion, the Chips Act is a crucial legislative text that will help the EU double its global market share in semiconductor production and export. It is part of a broader strategy to reduce the EU’s vulnerability to geopolitical shocks and promote the production of more clean technology. With the implementation of this act, the EU is set to become a major player in the global semiconductor market, creating new jobs and boosting economic competitiveness in the region.