The European Commission looks set to relax state aid rules for innovative semiconductor plants, under plans announced on Tuesday to help confront semiconductor shortages and strengthen Europe’s “technological leadership.”
The European Chips Act aims to bolster Europe’s competitiveness, resilience and help achieve both the digital and green transition.
It seeks to do this will be by mobilising more than €43 billion of public and private investments and set measures to prevent, prepare, anticipate and swiftly respond to any future supply chains disruptions.
By doing so, it is also expected to enable the EU to reach its ambition to double its current market share to 20 per cent in 2030.
The key elements of the scheme are:
The new initiative comes after global semiconductor shortages had a major effect on the economy during the COVID pandemic, as demand for electrical products using them increased at the same time as supply chain problems decreased their availability.
Car sales in Europe were hit particularly hard, with the European Automobile Manufacturers’ Association (EAMA) in October blaming concerning declined sales on the shortage.
In cars, semiconductors are used for driver assistance systems and computer management of engines, but they are also required for a significant chunk of consumer electronics.
Commission President Ursula von der Leyen commented on the plan, saying: “The European Chips Act will be a game changer for the global competitiveness of Europe’s single market.
“In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions. And in the mid-term, it will help make Europe an industrial leader in this strategic branch.”
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