EU plans chipmaking 'ecosystem'

1 min read

The European Commission's plans for a new chipmaking 'ecosystem' to keep the EU competitive and self-sufficient is certainly an interesting move.

It's certainly highlighted the impact of the ongoing global semiconductor shortage which has demonstrated the real risks associated with outsourcing supply to US and Asian-based suppliers.

Speaking to the European Parliament, Commission President Ursula von der Leyen said in a policy speech that, "digital is the make-or-break issue."

She went on to say that the Commission would be presenting a European Chips Act, the aim of which would be to jointly create a state-of-the-art European chip ecosystem, including production.

Last year the United States announced something similar - its CHIPS for America Act which was intended to help it compete with Chinese technology.

A European Chips Act is likely to encompass research, production capacity and international cooperation, and the EU is likely to consider setting up a dedicated European Semiconductor Fund.

The EU is certainly over-reliant on Asian-made chips and has seen its share in the supply chain, from design to manufacturing capacity shrink significantly.

If it does succeed in creatng a new chip ecosystem it will have taken a signficant step in securing the supply of chips and laying the foundation for developing new markets, but there are big challenges involved.

Where can it securely source rare earth minerals and the level of investment required could put off those companies with the experience and technical skills to support such an effort.

As always, passing legislation will prove the easy bit!