The European Commission announced the long-planned "Chip Act" on the 8th, hoping to increase the supply of chips by 2030 to four times the current amount by increasing investment and strengthening research and development, so as to enhance industrial autonomy.
Announced the chip bill
The "Chip Act" proposed by the EU on the 8th includes a package of measures aimed at helping the EU implement green and digital transformation while ensuring its leading position in chip manufacturing.
According to Deutsche Presse Presse, according to the bill, the EU intends to use more than 45 billion euros (about 51 billion US dollars) of public and private funds to double the EU's market share in the chip field to 20% by 2030. About 30 billion euros of the funds are already in the EU budget or in the plans of member states, and the other 15 billion euros are new funds. These funds will mainly be used for new factories and related research and development. Key elements of the Chip Act also include easing restrictions on certain state subsidies in member states.
Ursula von der Leyen, President of the European Commission, said in a speech that day that the emphasis on the chip industry will ensure that the EU will not miss this new industrial revolution. In the short term, this move can help predict and avoid disruptions to the chip supply chain and enhance resilience to future crises; in the long run, the "Chip Act" may enable knowledge transfer "from the lab to the fab" , and positioned the EU as a "technology leader in innovative downstream markets".
Von der Leyen said that the EU has set a target of 20% of the global market, and given the growing global demand, reaching this level means quadrupling the current supply. Von der Leyen said that chips are at the heart of global technological competition and the cornerstone of a modern economy. Von der Leyen said that Europe's "Chip Act" will help link research and development, testing and other links, and help coordinate investment in the EU and member states.
EU Commissioner for Industrial Development Thierry Breton urged the bloc to set as ambitious targets as possible to reach a scale comparable to the US-related plans. Breton said that without chips, it would be impossible to complete digital and green transformation and lead in technology, and ensuring supply security in the most advanced chips has become an economic and geopolitical priority.
Subsidy policy raises concerns
The EU's proposed "Chip Act" also needs to be approved by EU member states and the European Parliament. Foreign media reports show that there may still be differences of opinion among member states.
The Deutsche Presse-Agentur reported that state subsidies from EU member states play a very important role as new large-scale chip factories often require huge investments. As a result, one of the most important parts of the chip bill, about easing restrictions on state subsidies, is likely to be the most contentious and difficult part of the bill.
The EU believes that subsidies could make it easier for EU governments to provide funding to chipmakers. As many countries and regions hope to speed up the internal supply of chips, some large chip manufacturers are choosing the most suitable locations for their new factories around the world, and state subsidies are also one of the considerations.
Intel plans to make a large-scale investment in Europe, and has not yet decided on the final location. Countries such as Germany, France and Italy may be within the scope of its inspection. Intel Chief Executive Officer (CEO) Pat Gersinger told German media recently that its final decision depends not only on the right location and employees, but also on what subsidies can be obtained when building the factory.
However, some member states may oppose any expansion of state subsidies because they worry that excessive subsidies will hinder market competition and inhibit innovation.
Henning Fuppel, head of the European Policy Centre, said that by restricting competition and free trade, the EU was pursuing a dangerous industrial policy that would jeopardize the fundamental principles of the bloc.
Von der Leyen said that Europe needs advanced production plants, which means a huge up-front investment, so it is also necessary to change the rules of state subsidies, stressing that this will be accompanied by strict conditions. The European Commission has pledged that every project supported by the Chip Act will be subject to strict anti-competitive scrutiny.
In addition, Reuters reported that some smaller EU economies are also uneasy about easing restrictions on state subsidies, worrying that a "subsidy race" will give large economies such as Germany and France an advantage.
Agence France-Presse reported that some critics have doubts about an emergency mechanism in the EU's "Chip Act" that would limit the export of chips in emergencies such as a sudden shortage of supplies.
Strengthen the autonomy of the chip industry
Chips are increasingly used in fields such as automobiles and smart devices, and once the supply is short, the impact will be huge. After being disrupted by the epidemic in 2020, the supply of chips continued to be in short supply, and the automobile, an important European industry, suffered a huge impact: manufacturers such as Volkswagen had to reduce production frequently; some EU member states even dropped car production by a third; due to lack of Inventory, some consumers in Europe have to wait months or even a year to pick up their cars. This highlights the EU's over-reliance on overseas chip suppliers.
In the 1990s, the EU occupied more than 40% of the global chip market. But the EU currently accounts for about 10% of the global chip market, and the supply of chips mainly depends on imports. In order to strengthen its autonomy in the chip industry, the European Commission hopes to further integrate the chip research and development industry, build its own production capacity, and diversify supply with partners such as Japan and the United States, DPA reported.
The Associated Press reported that the current gas shortage in Europe and Europe's dependence on Russian energy are showing the risk of economic dependence, and Europe is accelerating action through its "Chip Act" to enhance economic independence in the key semiconductor field.
Others point out that the scale of the EU's "Chip Act" is not yet sufficient, and most of the funds are for existing projects, not new funds.
Agence France-Presse reported that Europe is facing considerable pressure to move quickly to develop the chip industry. Asian countries and regions such as South Korea are also planning to invest heavily in subsidies to accelerate the development of their chip industries. In contrast, the EU's investment appears to be insufficient.
(Editor in charge: Zhu Xiaohang)