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EU unveils multibillion-euro chip production plan

February 8, 2022

The plan to quadruple the supply of semiconductors in Europe by 2030 mirrors similar US moves aimed at avoiding technological dependency on Asian suppliers.

PC circuit board
Chips anyone? Western manufacturers are sorely dependent on Asia chip makers, prompting reconsideration of existing business modelsImage: Imaginechina-Tuchong/imago images

The European Union on Tuesday unveiled its new Chips Act, in which the bloc will spend some €42 billion ($48 billion) in public and private funds to become a microchip producer.

The plan is similar to one launched by the US, which will spend $52 billion with the aim of producing semiconductors at home to break dependency on Asian markets.

Why is the EU joining the chips race?

The 27-nation EU is moving to boost its economic self-sufficiency in the critical semiconductor sector, which has been plagued by supply chain shortages for more than a year.

Microchips, otherwise known as semiconductors, are made mainly in Southeast Asia and are used in everything from smartphones to cars. Dependence on a limited number of chip producers in Asia has raised concerns in the West as massive shortages have brought assembly lines to a halt.

European Commission President Ursula von der Leyen says the Chips Act will link research, design and testing, but also coordinate EU and national investments.

The European Automobile Manufacturers' Association (ACEA), a lobbying group, released a statement after Tuesday's EU announcement, saying: "In light of the European Chips Act to be published today, ACEA is urging the EU to reduce its reliance on overseas suppliers to avoid such damage to strategic European industries in the future."

Europe overhauls its semiconductor strategy

js/rt (AFP, AP)