EU wants chips with everything

Business news |
By Nick Flaherty

The European Union has released its proposed Chips Act to boost production of semiconductors in the region with a raft of ‘chip-based’ proposals.

These include funds for a leading edge European foundry, a virtual design platform and support for startups.

The Chips for Europe Initiative will pool resources, with $11bn available to “to strengthen existing research, development and innovation, to ensure the deployment of advanced semi-conductor tools, pilot lines for prototyping, testing and experimentation of new devices for innovative real-life applications, to train staff and to develop an in-depth understanding of the semi-conductor ecosystem and value chain.”

The funding will be for two types of ‘first-of-a-kind’ facilities, Integrated Production Facilities and Open EU Foundries. This would allow existing non-semiconductor companies such a car makers to build a fab, or, like Intel or TSMC, to build a foundry in the region. This would stop Intel for example building another of its own fabs in the region.

There will also be $2bn for equity investments in startups in the semiconductor area through a ‘Chips Fund’, building on the approach taken by the EIC. It will also include a dedicated semiconductor equity investment facility under InvestEU, as well as a boost to investment in skills and training for semiconductors.

All together, the EU expects $43bn to be available from member states and industry.

The “Chips Joint Undertaking” will shift the current Key Digital Technologies Joint Undertaking to semiconductors, with a new framework to ensure security of supply by attracting investments and enhanced production capacities for advanced process nodes and new areas such as quantum computing.

The EU is also using this to pay much closer attention to the industry. The legislation says that “Europe should develop an in-depth understanding of global semiconductor supply chains” and proposes a coordination mechanism between the Member States and the Commission for monitoring the supply of semiconductors, estimating demand and anticipating the shortages.

This will monitor the semiconductor value chain by gathering key intelligence from companies to map primary weaknesses and bottlenecks, with actions to be taken from a new emergency toolbox. This will include the European Chips Infrastructure Consortium (ECIC) that is specifically developed to simplify and structure public-private investments, particularly in High Performance Computing, Artificial Intelligence, and Cybersecurity, together with skills development and the deployment of digital innovation hubs.

In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory and transparent terms. This aims to bring together design houses, start-ups and SMEs, intellectual property (IP) and tool suppliers and designers, integrating existing and new design facilities with extended libraries and EDA tools. This will also include open pilot lines for the next generation of production capabilities and their validation.

This will also include contributing to building advanced technology and engineering capacities for accelerating the innovative development of quantum chips in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities.

“The European Chips Act will be a game changer for the global competitiveness of Europe’s single market. In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions,” said Ursula von der Leyen, Commission president. “In the mid-term, it will help make Europe an industrial leader in this strategic branch. With the European Chips Act, we are putting out the investments and the strategy. But the key to our success lies in Europe’s innovators, our world-class researchers, in the people who have made our continent prosper through the decades.”

The Commission has published a Recommendation to member states to get started on the proposals.

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