Europe has given the definitive green light to the regulation to double the production of chips in the Old Continent. A plan that should mobilize 43 billion of investments and lead the world market share of European semiconductors since 10 to 20% by 2030.
On Tuesday morning, the European Council gave the green light to the last stage of the decision-making process of the regulation after Parliament’s approval. The EU plan, called Chips Actrequires the Union to budget 3.3 billion of those who are thinking of mobilizing. Funds that will add to existing programs and actions, such as Horizon Europe and the Digital Europe programme, together with support from individual member states.
The objectives of the Chips Act. Urso: “Great satisfaction”
The goal of the Chips Act is to foster innovation in next-generation technologies, offering access to “design tools and pilot lines across Europe for prototyping, testing and experimenting with cutting-edge semiconductors”, reads the EU Commission page. Certification procedures will be implemented to ensure energy efficiency and the security of critical chips. The chips are fundamental building blocks for both the development of networks 5G that for the systems of artificial intelligence.
The plan also aims to promote the creation of an investor-friendly environment by encouraging the construction of manufacturing facilities in Europe. This will provide vital support to startup innovative, alle scaleup and at Pmi to access equity financing. The Chips Act also aims to develop “skills, talent and innovation in the semiconductor industry.”
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This should guarantee, according to the intentions of the European legislator, the development of a “highly skilled workforce and competitive, ready to respond to future challenges”. A crucial aspect of the initiative is also the creation of tools to predict and address possible shortages and crises in the semiconductor sector, ensuring security of supply. The most recent example is what happened in 2021, when world industry found itself in serious difficulty due to the impossibility of finding chips on the market capable of guaranteeing the continuity of the production of goods.
“The approval of the regulation on chips by the EU Council of Ministers represents an important step in the right direction”, said the Minister of Enterprise and Made in Italy, Adolfo Urso. “As the Italian Government, since our establishment, we have supported the need for greater strategic autonomy at the European level by supporting investments in new technological frontiers, such as semiconductors, electric batteries, cyber security and artificial intelligence”, he added.
“We are working on the Italian plan on chips which, in the wake of the European regulation, will allow us to strengthen the domestic supply chain and attract foreign companies, thus helping to define technological sovereignty” concluded the minister.
The role of chips in world industry. Why the Chips Act is important
Chips have become the building blocks of global industry. The world became aware of their role immediately after the pandemic, when the production crisis due to the stoppage of many companies created a global shortage of these small but crucial components of the electronics industry.
They perform a bit of all the functions within the electronic devices. Small brains capable of performing various operations, the chips can be designed to operate computers, smartphones, store data or process images, texts and audio files. But they are widely used in the transportation, logistics, mechatronics industries. Just to build a smartphone, at least twenty are needed, but it is an indicative number that can vary from model to model.
Tsmc, the Taiwanese semiconductor giant, is now the world‘s largest microchip maker. Its chip-making capability is envied by many developed Western countries, which are taking steps to boost domestic chip production.
Europe is looking to take more control of its supply chain to reduce its dependence on foreign market players. The move is part of an EU push to achieve the “digital sovereignty“, which refers to the idea of having more control over critical technologies.
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But at the same time, Europe knows it cannot achieve this increase in production alone. There are currently no European companies capable of producing state-of-the-art chips.
The Union’s objective is therefore to attract financing from foreign companies to its market. US chip-making giant Intel is among companies ramping up its investments in Europe and has announced investments of approx 33 billion euros to increase chip production in the Old Continent.
In February, chip companies in the UK threatened to leave the country for lack of similar government support. Support which, on the other hand, is not lacking in the United States, where the Joe Biden administration approved a plan similar to the EU one in August 2022, with 280 billion of allocated funds.