Negotiating teams from the European Parliament, the Swedish Presidency of the Council and the Commission have reached an agreement on the European Chip Act, a series of measures aimed at bringing the EU’s share of the global semiconductor value chain to 20% by 2030 (in currently, this is 9%). The package includes a relaxation of rules to allow more government subsidies for advanced chip installations, an EU budget for microchip research and development and tools to monitor possible supply shortages.
The deal, which was reached weeks earlier than expected, paves the way for an increase in subsidies that should allow the bloc to catch up with other major chip hubs such as the United States, South Korea, Taiwan and China . The plan was put in place in the wake of shortages caused by the coronavirus, but over the past year, tensions between China and Taiwan have underscored the importance of rethinking supply chains.
“This will allow us to rebalance and secure our chip supply chains, reducing our collective dependence on AsiaInternal Market Commissioner Thierry Breton said in a statement to POLITICO after the deal was struck.
Chipmakers such as Intel, STMicroelectronics and GlobalFoundries have already committed to building multibillion-euro facilities in Germany and France and will seek approval for national subsidies under new state aid rules. Taiwan-based TSMC, a world leader in the production of more advanced chips, is reportedly considering an investment in Europe, but has yet to make a formal decision.
The national subsidies, which are to be approved in accordance with the new state aid rules, will represent the largest part of the total sum of 43 billion euros for investments.
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