A free hand for the European Union's plan to double its market share in the semiconductor sector. The negotiators of the Council, the institution where the governments sit, and the European Parliament reached an agreement yesterday in Strasbourg on the new European chip law, which plans to invest 43,000 million euros in the sector.
The initiative, presented in February 2022 due to the global supply problems of certain components that followed the pandemic, has gained more relevance as a result of the war in Ukraine, which has led the Twenty-seven to conspire not to repeat the mistakes committed with Russia and reduce its dependence on Asia. The agreement must be formalized by the two co-legislators, but – barring historical surprises such as the one that Germany gave with the regulations on combustion engines – the details of the regulations have been decided.
The new European law on chips aims to double the European Union's share of global semiconductor production to 20% by 2030. To this end, the authorization processes for the construction of factories considered "first of their kind" will be streamlined. , which may receive public funding for their role in reinforcing security of supply.
Although the original proposal proposed financing only the latest generation chip factories, the agreement reached yesterday broadens its scope to include the entire value chain, including chips based on older technologies, as well as the production of equipment used for manufacturing chips, a sector where Europe has companies that are world leaders. There will also be support for research and design facilities through the creation of European "centres of excellence".
The recent decision of the American manufacturer Intel to establish itself in Germany reinforced the arguments of the smaller countries that demanded a broader approach to the plan that would allow them not to be left out of the aid framework. The Spanish Government, which has launched a Perte Chip to attract investments endowed with 12,250 million euros, is confident that the new European framework will encourage the installation of a chip factory in the country, although it has recently admitted that "it is not easy ”.
In recent months, in addition to Intel, other global semiconductor manufacturers have chosen the EU for their investments. The Californian company GlobalFoundries has partnered with the French-Italian STMicroelectronics to open a new factory in France, while the Taiwanese TSMC is negotiating with Saxony to open a new factory in that German state.
“In a geopolitical context of risk reduction, Europe is putting its destiny in its own hands. By mastering the most advanced semiconductors, the European Union will become an industrial power in the markets of the future”, assured the European Commissioner for the Internal Market, Thierry Breton, at the end of the negotiations with the European co-legislators.
“The European vision of doubling our market share by 2030 to 20% and producing the most sophisticated and energy-efficient semiconductors in Europe is already attracting substantial private investment. We are now mobilizing considerable public funding and the regulatory framework to make this vision a reality”, stressed the French commissioner, the most ardent defender of the recovery of European industrial sovereignty.
The Swedish Minister for Energy and Industry, Ebba Busch, whose country is chairing the EU Council this semester, was also enthusiastic about the possibilities that the new regulations open up for European industry. "The rapid implementation of the agreement will transform our dependence on market leadership, our vulnerability on sovereignty, our investment spending," she said in a statement.
Despite its high endowment, the aid provided for in the new community framework to boost the manufacture of chips falls short of the level of support being mobilized by Asian countries or the United States, which has approved 52.7 billion dollars in incentives for the sector, less dependent on public support than the European one, warn different analysts, who believe that the EU may have a difficult time competing on a global scale.
The main objective, however, is to strengthen European resilience and reduce foreign dependency in a key economic sector, especially in turbulent times like the present, given the experience with the pandemic and the fact that Taiwan currently produces 60 % of chips manufactured in the world.
