European Chips Act Proposed To Address Semiconductor Shortages

Motorcycle manufacturers reported issues with the semiconductors supply chain as far back as February, 2021. While brands continue to adapt to the chip shortages, German technology company Bosch has supported more semiconductor production in the European Union (EU) and President Biden has pushed for the same in the States. Now, the EU is prioritizing similar policies with the European Chips Act.

If adopted, the initiative will utilize €43 billion ($47 billion USD) in public and private investments to double the EU’s semiconductor market share to 20 percent by 2030. In addition to supporting the continent’s research, technology, and design resources, the bill will help establish a robust chip manufacturing and packaging sector.

“Chips are necessary for the green and digital transition - and for the competitiveness of European industry,” admitted European Commissioner for Competition Margrethe Vestager. “We should not rely on one country or one company to ensure safety of supply. We must do more together - in research, innovation, design, production facilities - to ensure that Europe will be stronger as a key actor in the global value chain.”

To establish a broader semiconductor ecosystem, the European Chips Act will also assist startups as they approach a sustainable business model. To prevent future shortages, the Commission's Member States will pool resources to track semiconductor supply, demand, and potential shortages.

“With the European Chips Act, we are putting out the investments and the strategy,” explained EU President Ursula von der Leyen. “But the key to our success lies in Europe's innovators, our world-class researchers, in the people who have made our continent prosper through the decades.”

In order to go into effect, the European Parliament and the Council will need to approve the proposed regulation. Unfortunately, a concrete approval date hasn’t been determined, but in the meantime, the Commission will help “co-legislators to reach an agreement as soon as possible.”

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