Following a vote on Tuesday 24th of January, the latest drafts of the EU Chips Act and the Chips Joint undertaking were adopted by The Industry and Energy Committee.
Proposals for the EU Chips Act were first published in February of 2022, and has since developed through committee discussions. The European Commission said the Act was developed in response to the industry chaos catalysed by the pandemic in 2020.
Now, after so long, the final vote is just around the corner.
There are three main elements to the Act:
The Chips for Europe Initiative is aimed at supporting capacity building and large-scale innovation. This is hoped to strengthen the EU as a player in the semiconductor manufacturing industry. It will increase funding for R&D, training and tech start-ups, among other things.
The Act also plans to secure the supply of semiconductors to the EU by way of investment. They also plan on increasing capacity in manufacturing, packaging and advanced testing. Alongside that, it hopes to enable the opening of integrated production facilities and open EU foundries.
Another purpose of the Act is to coordinate a crisis response between EU member states and monitor supply of semiconductors. If supply is watched, shortages and demand can be anticipated and trigger countermeasures.
The EU claims that the initiatives and funding within the Chips Act will aid it in its goal of doubling its global market share by 2030. Going from 10% market share to 20% is quite a leap, and the Act in total only mobilises €43 billion.
The European Commission said they hoped the Act’s funding would be boosted, or even ‘matched’ by private investment. This would immensely boost what the Act could be capable of, well beyond 2030.
Article 11 of the Act details the concept of the new Open EU Foundries. These new ‘first-of-a-kind’ facilities will design and produce electronic components for other industry players. There will also be Integrated Production Facilities, which design and produce components for their own market. For these facilities to qualify for funding they have to fit certain criteria, including committing to innovation.
Something else the Act addresses is the training of industry staff. It has been a continuous challenge for the sector in Europe to attract highly-skilled persons to work in semiconductors. The Chips for Europe Initiative will support education, training and skilling, while also providing placements and apprenticeships.
The vote in plenary is due to take place in February. From there it would be the last step before European Commission, Parliament, and Council negotiations.
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