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The EU moves closer to blockbuster investment in domestic semiconductor chip production

According to EU data, many vital technology sectors in the bloc are experiencing supply shortages in semiconductor chips, mainly due to Europe’s dependence on imports from a limited number of companies and countries. To tackle this problem, the union wants to boost its domestic industry by introducing new legislation.

The European Parliament took its position on Wednesday on two bills: the Chip law and the Chips Joint Undertaking.

Regarding the chips law, MEPs approved the text of the industry committee and expressed their support for the three main measures:

  1. Strengthen technological capability and innovation and attract talent.
  2. Stimulation of investments and increase of production capacity.
  3. Implementation of a crisis response mechanism, enabling the Commission to monitor semiconductor supplies, assess risks and anticipate shortages.

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Commenting on the Chips Act, rapporteur Dan Nica said that it should make Europe a “major player” in the global semiconductor market. “Not only should the budget be commensurate with the challenges and financed with new money, but the EU should be a leader in research and innovation, have a business-friendly environment, have a fast permitting process and invest in a skilled workforce for the semiconductor sector. ,” he added.

In a separate vote, MEPs also supported the Chips Joint Undertaking’s proposal, which implements the measures proposed under the Chips for Europe initiative and complements the Digital Europe And Horizon Europe programs. The aim is to increase investment in research, development and innovation infrastructure to support large-scale capacity building.

“Microchips are an integral part of the EU’s digital and green transition and our geopolitical agenda”, Rapporteur of the Chips Joint Undertaking Eva Maydell said. “We advocate for new financing that reflects the strategic importance of the European French fries sector. Europe’s partners and competitors are also investing heavily in their semiconductor facilities, skills and innovation.”

The European Parliament is now ready to start discussions with the Council on both legislative proposals. If the negotiations are successful, the Chips Act could be a game changer for Europe. With an earmarked €43 billion and aiming to account for 20% of the world’s supply by 2030, the law could help the EU strengthen its competitiveness and sovereignty in the sector.

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