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European Chips Act: details on the Commission's plans

The European Commission is due to publish its European Chips Act on 8 February. However, information on the Commission's plans is already circulating.

The European Commission would publish a set of documents:

-a strategy document laying down its multiyear plan for the semiconductor industry,

-a regulation (the European Chips Act) on funding for semiconductors

-a recommendation for a "toolbox" to address chip shortages in Europe

-a proposal to modify the Regulation on Joint Undertakings under Horizon Europe

The objective for the EU is to reach 20% of market shares in 2030, compared to 10% now.

With these proposals, Member States would have to monitor the chip's supply in Europe by collecting information on production capability, supply capacity and disruptions to identify potential crisis response measures.

The EU could also put in place a mechanism of export surveillance in times of crisis. This is similar to what the EU put in place for vaccines. Concretely, that could take the shape of an export authorisation mechanism for chips.

Similarly, the European Commission could be given the power to negotiate the purchase of chips on behalf of two or more EU countries, reinforcing its bargaining power.

In the European Chips Act itself, the European Commission proposes to support two kinds of facilities: "Open EU Foundries" that would devote a significant amount of their manufacturing capacity to production for other industrial players", and "Integrated Production Facilities" that design and produce components serving their own markets. Projects would be assessed on an individual basis.

The initiative would provide a multibillion-euro public investment programme up to 2027. In addition, the Commission wants to set up pilot lines for cutting-edge chip manufacturing in Europe. It also wants to work with the industry on a chip certification scheme to ensure that chips will be energy-efficient and secure.

A new European Semiconductor Board would be set up. This Board would coordinate policy across the EU, including monitoring chip supplies, allocating funding and triggering crisis-management tools.

Next steps

The European Chips Act is expected to be announced on 8 February.  

If you have any questions on this topic, please contact Camille Dornier - Policy Manager: camille.dornier@eurosmart.com