Semiconductors: MEPs ready to start talks on new law to boost EU chips industry

This article is brought to you in association with the European Parliament.

• Recent shortage of semiconductors highlight Europe’s dependence 
• New law aims to increase the EU’s share in global production capacity of semiconductors to 20% 
• Plans to increase the EU’s technological capacity, production and innovation 
• A crisis response mechanism needed in case of shortages 

The draft bill seeks to secure the EU’s supply of chips by boosting production and innovation, and setting up emergency measures against shortages.

Parliament set its negotiating position on two draft bills: one on the “Chips Act”, which aims to bolster technological capacity and innovation in EU Chips, and a second one on the Chips Joint Undertaking to increase investments for developing this type of European presence.

On the Chips Act, MEPs endorsed the text adopted by the Industry Committee, which focusses on next-generation semiconductors and quantum chips and on creating a network of centres to address the skills shortage and attract new talent on research, design and production. They also want to support projects aiming to boost the EU’s security of supply by attracting investment and building up production capacity.

Measures to respond to future shortages

A crisis response mechanism would be set up, with the Commission assessing the risks to the EU supply of semiconductors and early warning indicators in member states that could trigger an EU-wide alert. This would allow the Commission to implement emergency measures such as prioritising the supply for products particularly affected, or carry out common purchasing for member states.

“Chips for Europe” initiative

In a separate vote, MEPs adopted with 594 votes in favour, 15 against and 27 abstentions, the Chips Joint Undertaking proposal, implementing the measures foreseen under a “Chips for Europe” initiative. The scheme aims to support large-scale capacity building through investment into EU-wide and openly accessible research, development and innovation infrastructure.

Quotes

Rapporteur on the Chips Act Dan Nica (S&D, RO) said: “The EU Chips Act should establish Europe as a key player in the global semiconductors arena. Not only does the budget need to be commensurate with the challenges and funded through fresh money, but the EU should lead in research and innovation, have a business-friendly environment, a fast permitting process and invest in a skilled work force for the semiconductor sector. Our goal is to ensure growth in Europe, prepare for future challenges and have in place the right mechanisms for future crises”.

Rapporteur on the Chips Joint Undertaking Eva Maydell (EPP, BG) said: “Microchips are integral to the EU’s digital and green transitions as well as our geopolitical agenda. We are calling for fresh funding that reflects the strategic importance of Europe’s Chips sector. Europe’s partners and competitors are also investing heavily in their semiconductor facilities, skills and innovation. We may not have the enormous financial firepower of the US, but the budget offered by the Commission and Council needs to reflect the seriousness of the challenge”.

Next steps

Parliament is now ready to start talks with the Council on both files.