More than a dozen EU Ministers for Industry expressed concerns about certain provisions of the Chips Act regulation on semiconductors, notably on the issue of inclusiveness, both territorially and for SMEs and start-ups, at the Competitiveness Council in Luxembourg on Thursday 9 June.
All delegations welcomed the main principles governing the European Commission’s proposal, in particular as regards coordination between Member States in times of supply difficulties. The Netherlands even called the initiative “historic”.
However, during the discussions, four main concerns were raised. The first, expressed by a large number of Member States (including Ireland, Lithuania, Latvia, Finland, Greece, the Netherlands, Sweden, Bulgaria, Slovakia, Poland, Slovenia and Malta), pertains to the risk of distorting competition within the internal market. The recurrent remark about the proper functioning of the internal market was also underlined by Vice-President Margrethe Vestager at a press conference.
Several ministers stressed the importance of having a territorial balance that includes the peripheral States and the whole value chain. As regards the value chain, many of these Member States have warned against concentrating efforts on critical companies at the expense of SMEs and start-ups.
The second major concern is the need to maintain sound international cooperation with partners close to the EU’s values, such as the US, with some pointing out that at best the EU will only be able to account for 20% of global semiconductor production. This point was made by countries including Ireland, Lithuania, Latvia, Greece, the Netherlands, Sweden and Slovakia. At the press briefing, responding to EUROPE, Ms Vestager stressed the importance of maintaining appropriate partnerships for conventional semiconductors as well, the international production of which is constantly growing.
Finally, the third apprehension concerns the European Commission’s supposed emphasis on advanced semiconductors (2 nanometres) when the vast majority of the industrial ecosystem is suffering from shortages of basic semiconductors, as Lithuania, Hungary and Poland in particular have pointed out, unlike the Netherlands, which has focused on advanced technologies.
The issue of clarity in the architecture of the system has been raised on many occasions, notably by Austria, Latvia, Finland, the Netherlands, Sweden and Estonia. Croatia and Luxembourg stressed the need to avoid red tape, especially with regard to monitoring production and supply in times of difficulty.
The role of the Commission has been questioned by ministers, particularly in terms of prioritising production in times of crisis. Luxembourg recalled that production chains for electronic chips are not very versatile. Similarly, the European Commission’s ability to compel companies to provide information has provoked a reaction. The lack of an impact assessment, which should normally accompany any text proposal, was highlighted by some European delegations, such as Finland and the Netherlands. Asked by EUROPE to comment on this, the Commissioner for the Internal Market Thierry Breton said that the recent internal working document had helped to advance the negotiations at a technical level (see EUROPE 12929/28).
The funding architecture of the initiative (around €3.3 billion) was criticised by Austria, which stressed the need to respect the Multiannual Financial Framework and the importance of not drawing on margins or reactivating expired investment funds. Sweden also felt that the issue of funding needed to be clarified.
On the European Commission side, Executive Vice-President Margrethe Vestager and Commissioner for the Internal Market Thierry Breton attempted to provide reassurance. The first promised that the European Commission will ensure geographical balance and maintain an extensive partnership network. She pointed out that being fully autonomous would require a huge financial effort, while the problem of skilled labour would not be solved.
The issue of skills was also highlighted by Thierry Breton. He assured that the whole ecosystem would be considered. On the integration of SMEs and start-ups, he assured that the ‘megafab’ gigantic production centres made it possible to supply a whole network of SMEs and start-ups. He said that the initiative will also allow for investment in technology. Once again, the Commissioner insisted that he had no protectionist intentions whatsoever.
At the end of the round table, the Czech Republic, which will take over the Presidency of the EU Council in three weeks’ time, announced that this was a priority issue for Prague. The Minister’s main point was the question of semiconductors and the need to focus not only on advanced technologies. The Czech Republic would like to reach a political agreement in the EU Council in December (see EUROPE 12959/20). (Original version in French by Pascal Hansens)