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[To Eurosmart members only]
Thierry Breton speaks on chips, digital files and energy
Yesterday [10 January], EU Commissioner Thierry Breton gave an interview to the newspaper Politico. He gave details on the upcoming European Chips Act and on other topics that are part of his portfolio.
Thierry Breton was interviewed by Nicholas Vinocur, a journalist at Politico.
On chips
Thierry Breton underlined that 80% of the production of chips is made in Southeast Asia. This situation is dangerous for Europe and the US. Later during the interview, the Commissioner explained that Asian car manufacturers have 0 issues with chip supplies. Thus, there are no restraints for Asian car manufacturers but there are restraints for others. The European Commission needs to investigate this issue.
Europe needs to multiply by four its production of chips. It is a complicated task because it takes 4 to 5 years to build a plant from scratch. Member States are interested in investing, the Commission will invest the triple.
The European Chips Act will be very similar to the US CHIPS Act. The Commission should unveil the European Chips Act in the coming weeks. Europe must ensure it has the necessary products for the future, including chips below 5 nm. Thierry Breton expects shortages to continue in the next few quarters and then Europe will catch up.
Thierry Breton mentioned CEA Leti and the Fraunhofer Institut, as examples of European leaders in research. However, Europe needs to produce more. Europe must ensure that it is able to welcome mega-fabs. You need the competencies to build mega fabs and you need energy. It is good to build mega fabs where competencies already are. R&D can be located in other places. Nicholas Vinocur mentioned Intel and its CEO Pat Gelsinger, a friend of Thierry Breton. The Commissioner answered that Pat Gelsinger invests in different places; he does not locate everything in the same place. It makes sense to spread some of the investment all over Europe.
The objective is not for Europe to do everything on its own, it is about re-balancing power. Europe needs the right level of international cooperation.
Nicholas Vinocur asked whether foreign companies could join the Semiconductor alliance. Thierry Breton answered that this will not be the case. First, Europeans need to know among themselves what they want to do. Then, they will invite foreign partners to help Europe fulfil its strategy.
If Intel is willing to benefit from the Chips Act, Thierry Breton does not see any problems, as long as foreign companies comply with Europe’s conditions.
On Europe’s security of supply
The journalist and the Commissioner discussed the overall security of supply in the continent. Exchanges were focused on the vaccine supply. Thierry Breton believes that it would be a good idea for Europe to have a Defense Production Act (DPA). The USA have a DPA and used it to block the exports of vaccine to Europe during the pandemic. Europe had to adopt an emergency tool -laying down the possibility to restrict exports- to have leverage in the discussion with the USA. Thiery Breton sees benefits in having a European DPA.
On the Digital Markets Act and the Digital Services Act
In Thierry Breton’s view, it is the role of policymakers to regulate the information space. It is a twofold mission: organising the economic part and protecting our democracies. In the beginning, the European Commission envisaged one single text but realised that two legislations were more appropriate: the Digital Services Act (DSA) and the Digital Markets Act (DMA).
The first trilogue of the DMA started on 11 January. The Commissioner hopes that the files can be concluded under the French Presidency. There is a very strong willingness to do so.
Thierry Breton exchanged with his US counterparts and sees appetite to have the same kind of legislation on the other side of the Atlantic.
On quantum
Nicholas Vinocur asked Thierry Breton "What is the one thing that really worries you about technology?". Thierry Breton answered: "that we miss the quantum wave". Nicholas Vinocur then asked "What is one thing you are very hopeful about?". Thierry Breton answered: "that we don't miss the quantum wave".
On the energy crisis
Thierry Breton is of the opinion that the energy crisis will last for the next 6 months. Energy policies are mostly in the hands of Member States, but the European Commission can accompany the policies. Europe needs to be fully interconnected in terms of electricity, which is not the case yet.
The Commissioner is in favour of investing 500 billion euros in the next generation of nuclear power. In his view, this is needed to transform all the industrial ecosystems to ensure that Europe reaches net zero-emission in 2050. Europe needs to double its production of electricity for the green transition. Now, 26% of electricity is produced by 103 nuclear plants. Europe needs to maintain or increase this nuclear production.
At the same time, Europe needs to invest 60 billion euros in renewables every year and 45 billion euros every year for the transportation of electricity.
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