European Chips Act could include powers for EU control

European Chips Act could include powers for EU control

Business news |
By Peter Clarke

The European Chips Act will be worth tens of billions of euros of reallocated state aid but will also come with powers to allow the EU control what is manufactured, according to reports.

Thierry Breton, the European Union’s internal markets commissioner told reporters on Friday that the European Commission will publish the details of the European Chips Act on February 8. The aim of the aim is to bolster European chip production and secure strategic supply chains. European politicians have repeatedly said they want Europe to have 20 percent of the global semiconductor production by 2030.

When asked how much funding would be available to incentivize the building of wafer fabs, Breton said: “I do not want to give you today the level of investment, but it will be commensurate to what the US wants to put in.”

The US Chips for America act is set to provide $52 billion in federal and state support for chipmakers. However, the complexity of the European political situation may make funds hard to find. Money for the European Chips Act is likely to be expected to come from the individual states and have to be taken from EU countries recovery plans, reports quoted officials saying.

To receive the money companies will have to show there are constructing “first-of-a-kind” production facilities and commit to future investment in leading edge technology.

Breton said the legislation in part takes inspiration from the US Defense Production Act and would include “tools” to secure the supply of chips in times of crisis, the reports said. In addition, the proposal would allow the EU, in times of crisis to demand that a company prioritize the production of certain products regardless of the impact on supplying other orders.

Legislators are considering whether to make it a legal requirement to respond to requests for information about stocks, delivery schedules and manufacturing capacity utilization. Another possible element of the legislation could be an export control regime and a system of fines for non-compliance with EU supply demands, the report said.

Related links and articles:

European Chips Act coming February, says EC president

‘Onshoring’ chip production in US, Europe is unrealistic

European Commission forms processor, semiconductor alliance

Semiconductor independence is not doable says European competition commissioner

ESIA tells European Commission to hurry up with IPCEI financial support

EU proposes Chips Act to build technology sovereignty

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