EU lawmakers back chip-production plan

By AFP   July 11, 2023 | 06:12 pm PT
EU lawmakers back chip-production plan
Chip producers that have already committed to building multibillion-euro facilities in Europe will need to seek approval for national subsidies. Photo by AFP/Jean-Pierre Clatot
The European Parliament on Tuesday formally approved an EU plan to greatly boost its own supply of semiconductors, a strategic goal to reduce dependency on Asia.

An overwhelming majority of lawmakers, 587 to 10, backed the EU Chips Act, which is meant to see European Union chip production quadruple by 2030 to account for 20 percent of global share.

Globalization and rise of Asian manufacturing has seen European activity in the sector dwindle in recent decades.

The market is dominated by Taiwan, which makes 90 percent of the most advanced chips, South Korea and, increasingly, China.

The Covid pandemic in 2020 caused supply chains from Asia to seize up, dealing serious shortages to the European car industry in particular.

Semiconductors are also vital for many other everyday items, ranging from smartphones to household appliances. They are also needed for data storage, which is in full expansion, and in green tech to reduce carbon output.

To reach its ambitious goal in chip production, the EU will have to mobilize more than 43 billion euros ($47 billion) in public and private investments.

The drive is part of a strategy of greater European self-sufficiency, championed by French President Emmanuel Macron, which has been galvanized by energy and food shocks caused by Russia's war in Ukraine.

The EU Chips Act calls for the EU to throw 3.3 billion euros at the goal from its budget, and for research and development to be reinforced.

A monitoring system to detect budding supply shortfalls is meant to alert the European Commission early enough so it can act urgently to head them off, including by organizing pooled purchases on behalf of the bloc, like it did for Covid vaccines.

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