24 Feb, 2022

Commission aims to tackle Chip shortage

 Commission announces measures to strengthen European competitiveness in Silicon chip sector, and ensure value chain security via strengthened supply and resilience.

Following the multi-sectoral factory shutdown resulting from the global shortage of semi-conductors, the Commission announced measures to strengthen European competitiveness in this sector, and ensure value chain security via strengthened supply and resilience.

The EU Chips Act aims to double the European market share to 20% by 2030 through mobilizing €43 billion of public and private investment. Stretching from research to production, it would ensure there is necessary capabilities to tackle reliance on the limited number of global actors, and ensure future supply chain disruptions do not cause similar effects to those resulting from the recent pandemic.

Thierry Breton, Commissioner for Internal Markets stated “ We are mobilising considerable public funding which is already attracting substantial private investment. And we are putting everything in place to secure the entire supply chain and avoid future shocks to our economy like we are seeing with the current supply shortage in chips. By investing in lead markets of the future and rebalancing global supply chains, we will allow European industry to remain competitive, generate quality jobs, and cater for growing global demand.”

Alongside these measures, the Commission has provided recommendations, with this tool enabling the coordination mechanisms between member states and the commission. Member states are being encouraged to start this coordination now, to ensure greater understanding of the current status in the semiconductor value chain and to take measures to overcome the current shortage until the regulation is adopted. Both chairs of the Industry, Research and Energy Committee and the Internal Market Committee welcome the Commission’s proposal.

The key components include;

  • Enhanced chips joint undertaking which will pool resources from member states and third countries associated with existing programmes.
  • €11 billion to strengthen RDI by deploying advanced semi-conductor tools, prototyping and experimentation of new application areas alongside training and knowledge building for personnel.
  • A new security and supply framework to attract new investment and enhanced production capabilities.
  • A ‘Chip Fund’ to help finance start-ups and help mature their TRL.
  • InvestEU dedicated semiconductor equity investment facilitate for scaling SME’s.
  • Coordination mechanisms to monitor supply of semiconductors through mapping value chain weaknesses and bottlenecks which will produce common crisis assessment and coordinate actions to be taken via a new emergency toolbox.
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