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How European Union Plans to Change the Global Chip Market


The European Union is willing to spend billions of euros to reshape the semiconductor industry. It outlined an ambitious new industrial policy that aims to make the bloc an important player in the global semiconductor industry. 

This week, the EU Commission adopted the European Chips Act. It bundles together €43 billion ($49 billion) in public as well as private funding for the industry. The goal of the European Chips Act is to double the EU’s share of global chip production from 9% to 20% by 2030.

For years, the European Union wanted to increase its leadership in the development and fabrication of semiconductor chips. The bloc unveiled a similar funding package in 2013. However, the global supply chain crisis triggered by the pandemic once more highlighted the importance of the problem. 

The European Union is not the only major economic power to realize the importance of the semiconductor industry to future economic growth. Countries around the world also decided to invest money in chips.

This week, the House of Representatives approved $52 billion of federal funding for the United States’ own semiconductor industry. In comparison with the world’s largest economy, the EU’s funding looks significantly weaker. Even though the top-line figures are similar, the EU’s €43 billion budget includes €30 billion in previously announced investments, with direct funding from the bloc, represents less than 15% of the total. 

Besides, the majority of the money is expected to be delivered by member states, whose lawmakers have yet to approve the act. The European Union has to deal with another important issue as well. It won’t be easy to attract manufacturers. Presently, Taiwanese firm TSMC dominates the semiconductor industry. The company is yet to announce any definite European investments. In the meantime, it decided to build new plants in the United States and Japan.




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