EU joins chips race with 42 bn euro bid to rival Asia

The EU launches a plan on Tuesday to raise tens of billions of euros to boost semiconductor production in Europe and end the bloc’s digital dependence on Asia.

The production of semiconductors, also known as chips, has become a strategic priority in Europe as well as the United States, after the shock of the pandemic choked off supply, bringing factories to a standstill and emptying stores of products.

The manufacturing of chips overwhelmingly takes place in Taiwan, China and South Korea and the European Union’s 27 member states want factories and companies inside the bloc to take on a bigger role.

Thierry Breton, the EU’s industry commissioner, on Tuesday will press Europeans to be as ambitious as possible and match similar plans in the United States, where the Biden administration is asking Congress to approve $52-billion.

If approved, the EU plans could generate a total of 42 billion euros ($48 billion) via existing EU budget money as well as by loosening existing rules on public subsidy from member states.

The main goal of the chip crusade will be to double Europe’s semiconductor capacity from 10 percent of the world’s value today to 20 percent by 2030.

The proposal will need the approval of the EU member states and European Parliament, where opinions will vary between the ambitions of industrial heavyweights such as Germany, France and Italy and those of smaller states that are worried about closing off valuable supply chains with Asia. AFP