The President of the European Commission, Ursula von der Leyen, announced, during her State of the Union address on Wednesday 15 September, that a new legislative initiative - a European Chips Act - will be launched soon with the aim of putting the EU back at the forefront of the global semiconductor market.
Turning to the digital economy and its importance for the future of the Union, the President then addressed the crucial issue of microchip production. “There is no digital without chips”, she said, recalling that currently all production lines are running at low capacity due to a shortage of semiconductors and growing demand.
She regretted that “Europe’s share across the entire value chain, from design to manufacturing capacity, has shrunk”, underlining the EU’s dependence on Asia. More than a question of competitiveness, it is also and above all a “matter of tech sovereignty”, she continued.
The aim is to jointly create a state-of-the-art European chip ecosystem not only in the design, but also in the production of electronic or semi-conductor chips. “This is a daunting task”, Mrs von der Leyen acknowledged, who nevertheless hopes that the success of the European navigation programme Galileo can be repeated. A project that many thought unfeasible 20 years ago is now in use on nearly two billion smartphones.
The day before, the European Commissioner for Internal Market, Thierry Breton, had ‘jumped the queue’ by talking, before the Commission President, in support of this European initiative on the French media outlet, CNEWS. The aim is to double the production capacity in Europe, he explained, indicating that we are talking about “billions” of units, in association with economic partners.
Via LinkedIn, the Commissioner also detailed his vision: semiconductors are becoming an issue of industrial, economic and also military sovereignty. The aim is also to respond to the positions of other superpowers, noting that the United States is currently discussing an ‘American Chips Act’ and that Taiwan wants to maintain its supremacy in this area.
See Thierry Breton’s post: https://bit.ly/3k8SmDQ
A three-pronged strategy. The strategy, which is based on the recent European Semiconductor Alliance (EUROPE 12765/11), is divided into three dimensions: - develop a European Semiconductor Research Strategy; - create a collective plan to strengthen European production capacity, in particular by developing European fabrication plants - “mega fabs” - able to produce both in high volume and with extremely high engraving precision (of the order of 2 nanometres); - develop a framework for international cooperation and partnerships to diversify supply chains and reduce European dependence.
A new IPCEI. On Tuesday 14 September, a debate was held in the EU Council’s Working Party on Competitiveness on the creation of an important project of common European interest (IPCEI) entitled ‘Microelectronics 2’. For the time being, little information has been released. During the exchanges, delegations stressed the need to ensure open access to the IPCEI for all Member States.
The initiative is expected to be presented in the first half of 2022. As a reminder, at the end of 2020, 13 Member States had co-signed a declaration to create an IPCEI for semiconductors in the face of shortages and dependence in the EU (see EUROPE 12617/10).
The need to accelerate. Contacted by Europe, MEP Christophe Grudler (Renew Europe, France) welcomed the announcement. “I think it is essential to accelerate the European Semiconductor Alliance: in the short term, this seems to me to be the best response. We need large European factories to have scale effects: this is the only way to be competitive”, he said.
See the State of the Union address: https://bit.ly/3ltHxvq
See the Commission’s letter of intent for 2022: https://bit.ly/3EmHlGS (Original version in French by Pascal Hansens)