Europe's $49 billion bet in the thirst for chips

 Europe's $49 billion bet in the thirst for chips

The European Commission passes the Chip Act with a $49 billion grant to address the regional and global chip thirst.

The EU's goal is to double its share of the continent's global chip production from 9% to 20% by 2030. According to The Verge, this is a long-term bet to reshape the global chip market. of Europe.

For many years, Europe wanted to increase its role in the development and manufacturing of semiconductor chips. In 2013, the EU proposed a new €100 billion funding program with a similar target but delayed. The global supply chain crisis caused by Covid-19 makes this plan even more important.

Ursula von der Leyen, EU President, said: "It is well known that global chip shortages have really slowed Europe's recovery. Entire production lines have come to a standstill while demand is increasing. We are unable to deliver on orders because of a chip shortage. So, the passage of the European Chip Act now makes perfect sense."

European Commission President Ursula von der Leyen speaking on the European Chip Act in Brussels, Belgium on February 8, 2022. Photo: Virginia Mayo

Ursula von der Leyen speaks on the "European Chip Act" in Brussels, Belgium on February 8. Photo: Reuters

The EU is not the only region recognizing the role of the chip industry in future economic growth. Last week, the US House of Representatives also passed the Competition Act, which grants $52 billion to the semiconductor industry.

Compared with the US, European funding is still less. In addition, the EU also has difficulty in attracting the world's major chip manufacturers. Currently, Taiwanese company TSMC dominates the semiconductor industry, generating more than half of global sales. Although it has been reported that TSMC is considering setting up a branch in Germany, no specific investment has been announced. Meanwhile, the company has confirmed that it is building new factories in Japan and the US.

Any plan to boost chip output will not alleviate the current supply disruption, at least until the end of the year, according to experts. However, the issue of "digital sovereignty" will be at the forefront of economic powers for decades to come.

"It must be clearly stated that no country, not even a single continent can be completely self-sufficient. This is not possible. Europe will always strive to keep global markets open. and connect with each other. This is in the world's interest, it's also in our interest. But what we need to solve is to untie the knots that are slowing Europe's development," Ursula von der Leyen said.