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EU approves billions in funding for chip law for domestic production


The EU Parliament has approved the Chips Act. 43 billion euros are to be mobilized in order to promote domestic microchip production – and to become more independent of other markets.

Industry Commissioner Thierry Breton is visibly satisfied and so are MEPs: Europe wants to regain lost ground and position itself better in the production of semiconductors, which are so important for the industry of the future.

Smartphones, cars, heat pumps, household and medical devices run on highly developed chips – and in future they should no longer come almost exclusively from the USA, South Korea and Taiwan. The EU Parliament has approved a corresponding law with a large majority.

We are investing in the future, Breton promises: “One could therefore say that with the Chips Act we are helping to reindustrialize Europe in the semiconductor sector along the entire value chain.”

Goal: 20 percent world market share

In doing so, they are pursuing two intentions: They want to achieve a 20 percent share of the world market – currently it is nine percent. And manufacture the most advanced semiconductors in Europe. “Because this is where the geopolitical and industrial strength of tomorrow will be decided.”

According to Breton, the law, the so-called Chips Act, is already having an effect. Since the EU launched the project, more than 100 billion euros in public and private investments in this area have been announced.

In 15 member states, 68 concrete and strategically important funding projects with a volume of 22 billion euros have been reported.

Europe must assert itself

“In view of the new geopolitical situation, it is imperative that Europe asserts itself as an industrial and technological power,” adds Breton. With a view to semiconductor production, this is a question of competition. “But it’s also about safety and technological sovereignty.”

With the law, the EU wants to simplify approval procedures for the construction of chip factories and facilitate state aid. This should bring more manufacturers to Europe and also affects foreign companies that want to produce in Germany: Intel in Magdeburg, Wolfspeed in Saarland, Infineon and TSMC in Dresden.

secure supply

An emergency mechanism including an early warning system should take effect when supplies become scarce again, as was the case during the corona pandemic. Then the commission can direct companies to manufacture certain semiconductors or buy them centrally on behalf of the member states.

According to the Commission, the EU wants to boost public and private investment by a total of 43 billion euros. The member states should raise the majority. Comparatively little comes from the EU budget.

Funding also for smaller companies

“We are now calling on the EU semiconductor sector to go forward with around 3.3 billion euros, unfortunately not with fresh money,” emphasizes Green MEP Henrike Hahn. “In the future, we need a clear commitment in the Council via our own resources to better support companies in Europe.”

Hahn welcomes the fact that not only mega-projects will be funded in the future, but also small and medium-sized companies and start-ups.

‘The times when Europe only invested in research and outsourced manufacturing are over,’ stresses Industry Commissioner Breton. “I say that very clearly. The Chip Act allows massive investments for a competitive European industry along the entire semiconductor manufacturing process.”

advancement necessary

Producing more semiconductors in Europe is also important to the social democrat Tiemo Wölken. But he is also concerned with advancing the development of the products. He is very pleased that a regulation has been found that makes it possible to design chips of the future in Europe. “This will make us less dependent on supply chains and we will move away from being just a workbench and towards technology leadership.”

From Wölken’s point of view, the law is a good boost for the much-needed race to catch up. Once member states have given the go-ahead, the Chips Act can go into effect.