EU moves step closer to fund chip production

1 min read

The European Union has taken a further step towards signing off a $46.6 billion plan to fund the production of semiconductors.

The EU has unanimously backed an amended version of the European Commission's original proposal, that which would put the 27-country bloc closer to its goal of reducing its reliance on US and Asian manufacturers.

European Union ministers are to meet on December 1 to effectively rubber stamp the chip plan. However, the plan will still need to be debated with the European Parliament before it can become law.

The EU is looking at state subsidies to help the bloc achieve a 20% share of global chip capacity by 2030 and comes in response to the global chip shortage and supply chain bottleneck that have bedevilled industries – from automotive to healthcare – over the last 18 months.

Europe's current share of chip production stands at just 8%, which is significantly down on the 24% seen in 2000.

What’s interesting about the amendments made to the original proposal is the decision to allow state subsidies for a much broader range of chips and not just advanced ones.

The big question now is where the funding will come from and there’s likely to be a lot of horse-trading within the bloc.

The Commission has suggested taking money from research programmes and using unspent funds but that has raised criticism from some who believe that it will only benefit those countries that already have chip facilities or are set to attract chipmakers.