US and EU on collision course over semiconductor industry: Page 2 of 2

February 12, 2021 // By Nick Flaherty
US and EU on collision course on semiconductor industry
The EU is set to clash with the US over semiconductor strategy for 5G and 6G, processor and cloud technology

"Do we want to remain mere bystanders and be the adjustment variable of the great geostrategic and economic balances at work, or do we want to rebalance power? My choice is clear. It is to put an end to the era of naivety: let us take our destiny into our own hands,” he said.

Following on from the $145bn semiconductor plan announced in December and the €13bn space plan last month, the EU is looking at key technology areas that it needs to boost and protect.

“Our industrial ambition does not, in any way, call into question either free competition or our openness to the world,” said Breton. “It presupposes reducing our dependency on a wide range of products such as lithium for our batteries or semiconductors for the automotive industry. This does not mean producing everything in Europe, but rather diversifying our sources of supply and creating European capacity of its own in strategic areas,” he said.

“It also means mastering the key technologies of the emerging industrial data economy: from 5G (and soon 6G), to the cloud and edge, via processors and supercomputers. Without these technological building blocks, there will be neither digital sovereignty nor digital transformation of our industrial systems.”

“One of the major lessons we can learn from this crisis is that all of us have become aware of some of our dependencies, both technological and industrial,” he said. “This was evident on the issue of certain raw materials which are essential for batteries. Take the European Battery Alliance. In three years, it has enabled over 100 billion euros of funding for projects throughout the value chain.”

But the call is for more centralisation. “Many industrial projects today are fragmented and scattered throughout Europe. Nevertheless, there should no longer be the slightest doubt: the right level for industrial projects is the European one,” he said.

The EU is planning to release a list of technologies that it considers critical to the region’s supply chain. “In the action plan on synergies between space, defense and civil that I will be presenting next week, we will be proposing a list of critical technologies that we will monitor regularly to enable Europe to move up the ladder,” he said.

All this is a long way from the EU’s paper on state aid in June 2020, and raises the prospect of a repeat of the subsidy battle between Boeing and Airbus.  

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