Proposal for a Regulation establishing a framework of measures for strengthening Europe’s semiconductor ecosystem (Chips Act)

Summary:

Legislative initiative tabled by the European Commission on 8 February 2022, setting out measures aimed at increasing the resilience of the European Union's semiconductor ecosystem and increasing its global market share. This is a text with EEA relevance.

Further information:

Semiconductor chips are the essential building blocks of digital and digitised products. Due to the COVID-19 (coronavirus) pandemic, Europe and other regions of the world have experienced significant supply challenges, and shortages of chips. Despite certain strengths, Europe has an overall global semiconductors market share of only 10% and largely relies on third-country suppliers. Faced with growing geopolitical tensions, fast growth in demand, and the possibility of further disruptions in the supply chain, it has been deemed necessary that Europe uses its strengths and puts in place effective mechanisms to establish greater leadership positions and ensure security of supply within the global industrial chain.

In September 2021, an EU Chips Act was announced during the annual State of the European Union (SOTEU) address. This draft law was published on 8 February 2022 alongside a Communication providing the reasoning behind the need to strengthen the EU's semiconductor system. The proposed measures include the establishment of a Chips for Europe Initiative and the establishment of a framework aimed at ensuring the security of supply. It also includes setting up a coordination mechanism between the European Commission and the Member States for strengthening collaboration, monitoring the supply of semiconductors, estimate demand, anticipate shortages, trigger the activation of a crisis stage and act through a dedicated toolbox of measures.

The Council of the European Union adopted a general approach on 1 December. The plenary of the European Parliament adopted a negotiating position on this proposal on 15 February 2023. An informal agreement between the co-legislators on a compromise text for this file was reached on 18 April.

• Primary Source

Commentary and Analysis

The New Statesman, 15/09/2021: The European Chips Act: why Ursula von der Leyen is embracing silicon nationalism https://www.newstatesman.com/science-tech/silicon-nationalism/2021/09/the-european-chips-act-why-ursula-von-der-leyen-is-embracing-silicon-nationalism

Bruegel: Opinion, 22/09/2021: Europe doesn’t need a ‘Mega-Fab’ https://www.bruegel.org/2021/09/europe-doesnt-need-a-mega-fab/

Politico, 21/10/2021: Europe’s microchips plan doesn’t add up https://www.politico.eu/article/europe-microchips-semiconductor-technology-plan-does-not-add-up/

CERRE: Events, 21/10/2021: Chips crunch: an EU “third way” to strategic autonomy in semiconductors? https://cerre.eu/events/chips-crunch-strategic-autonomy/

Deutsche Welle, 26/10/2021: Europe overhauls its semiconductor strategy https://p.dw.com/p/42CWP

ACEA: Message DG, 27/10/2021: Chip shortage: auto industry calls for more EU-made semiconductors https://www.acea.auto/message-dg/chip-shortage-auto-industry-calls-for-more-eu-made-semiconductors/

EurActiv, 29/10/2021: Chips geopolitics and EU’s new semiconductors sovereignty agenda https://www.euractiv.com/section/digital/opinion/chips-geopolitics-and-eus-new-semiconductors-sovereignty-agenda/

Center for European Policy Analysis, 04/11/2021: Chasing Chips: A Geopolitical Puzzle https://cepa.org/chasing-chips-a-geopolitical-puzzle/

Digital Europe: Joint Press Release, 04/11/2021: The EU Chips Act needs to create a competitive microelectronics ecosystem based on market demand https://www.digitaleurope.org/news/the-eu-chips-act-needs-to-create-a-competitive-microelectronics-ecosystem-based-on-market-demand/

SP Global: Market Intelligence: News, 07/02/2022: EU to unveil plans to boost local chip production https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/eu-to-unveil-plans-to-boost-local-chip-production-68743608

ING Think: Articles, 08/02/2022: EU Chips Act to boost Europe’s technological prowess and strengthen economy https://think.ing.com/articles/eu-chips-act-to-strengthen-europes-economy/

Politico, 08/02/2022: Europe has a chips plan — here are 6 things that could kill it https://www.politico.eu/article/european-union-chips-industrial-policy-european-chips-act-semiconductors/

The Economist, 09/02/2022: In the global chips arms race, Europe makes its move https://www.economist.com/business/in-the-global-chips-arms-race-europe-makes-its-move/21807603

Pinsent Masons: Out-Law News, 09/02/2022: Chips Act aims to make Europe a semiconductor powerhouse https://www.pinsentmasons.com/out-law/news/chips-act-aims-make-europe-semiconductor-powerhouse

CEPS: In Brief, 10/02/2022: The European Chips initiative. Industrial policy at its absolute worst https://www.ceps.eu/the-european-chips-initiative-industrial-policy-at-its-absolute-worst/

Euronews: Opinion, 11/02/2022: For the EU, microchips and geopolitics are two sides of the same coin https://www.euronews.com/2022/02/11/for-the-eu-microchips-and-geopolitics-are-two-sides-of-the-same-coin-view

The Economist, 12/02/2022: In the global chips arms race, Europe makes its move https://www.economist.com/business/in-the-global-chips-arms-race-europe-makes-its-move/21807603

Allen&Overy: Publications, 18/02/2022: The EU Chips Act: strengthening the EU’s technological leadership and confronting semiconductor shortages https://www.allenovery.com/en-gb/global/news-and-insights/publications/the-eu-chips-act-strengthening-the-eus-technological-leadership-and-confronting-semiconductor-shortages

Politico: Opinion, 10/02/2022: Europe’s digital future needs the private sector https://www.politico.eu/article/europe-digital-future-microchip-investment-private-sector/

Center for Strategic & International Studies (CSIS): Blog, 07/03/2022: The European Chips Act: A Strategy to Expand Semiconductor Production Resiliency https://www.csis.org/blogs/perspectives-innovation/european-chips-act-strategy-expand-semiconductor-production-resiliency

Emerging Europe: News & Analysis, 15/03/2022: EU Chips Act pays first dividends, with Poland a key beneficiary https://emerging-europe.com/business/eu-chips-act-pays-first-dividends-with-poland-a-key-beneficiary/

DigitalEurope: Policy Papers, 25/03/2022: DigitalEurope’s recommendations for the EU Chips Act: making the EU a catalyst for semiconductor investments https://www.digitaleurope.org/resources/digitaleuropes-recommendations-for-the-eu-chips-act-making-the-eu-a-catalyst-for-semiconductor-investments/

Federation of German Industries (BDI): Article, 29/03/2022: Can the European Chips Act deliver on its promises? https://english.bdi.eu/article/news/can-the-european-chips-act-deliver-on-its-promises/

Bruegel, 02/06/2022: Is the EU Chips Act the right approach? https://www.bruegel.org/blog-post/eu-chips-act-right-approach

French Institute of International Relations (IFRI): Briefings, 08/07/2022: Fishing for Chips: Assessing the EU Chips Act https://www.ifri.org/en/publications/briefings-de-lifri/fishing-chips-assessing-chips-act

Brookings Institution: TechStream, 09/08/2022: How Europe aims to achieve strategic autonomy for semiconductors https://www.brookings.edu/techstream/how-europe-aims-to-achieve-strategic-autonomy-for-semiconductors/

Association for European NanoElectronics Activities (AENEAS): News & Events, 20/08/2022: Proposed EU Chips Act progresses through legislative process https://aeneas-office.org/2022/08/20/proposed-eu-chips-act-progresses-through-legislative-process/#

Centre for European Reform (CER): Insights, 20/10/2022: The EU should abandon chip nationalism https://www.cer.eu/insights/eu-should-abandon-chip-nationalism

Deloitte: Insights, 03/11/2022: A new dawn for European chips https://www2.deloitte.com/uk/en/insights/industry/technology/semiconductor-chip-shortage-supply-chain.html

European Parliamentary Research Service (EPRS): Briefing, 28/11/2022: The EU chips act: Securing Europe's supply of semiconductors https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)733596

Friedrich Ebert Foundation: IPS Journal, 22/02/2023: A blind spot in the EU’s Chips Act https://www.ips-journal.eu/work-and-digitalisation/a-blind-spot-in-the-eus-chips-act-6525/

Institute of Electrical and Electronics Engineers: Spectrum, 08/03/2023: How the EU Chips Act Could Build “Innovation Capacity” in Europe https://spectrum.ieee.org/eu-chips-act-imec

Politico, 19/04/2023: Europe’s chips strategy staggers past the starting line https://www.politico.eu/article/with-its-chips-deal-europe-arrives-only-at-the-start-of-a-global-race/

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News

EurActiv: Topics: Chips Act https://www.euractiv.com/topics/chips-act/

Reuters, 15/09/2021: EU plans 'Chips Act' to promote semiconductor self-sufficiency https://www.reuters.com/world/europe/tech-is-make-or-break-issue-eu-chief-executive-says-2021-09-15/

Politico, 15/09/2021: EU proposes new law to speed up in global chips race https://www.politico.eu/article/eu-law-chips-race/

EurActiv, 15/09/2021: European Commission to launch Chips Act in bid for strategic autonomy https://www.euractiv.com/section/digital/news/european-commission-to-launch-chips-act-in-bid-to-strategic-autonomy/

Euronews, 16/09/2021: Von der Leyen pitches European Chips Act in a bid to boost the EU's tech self-reliance https://www.euronews.com/2021/09/16/von-der-leyen-pitches-european-chips-act-in-a-bid-to-boost-the-eu-s-tech-self-reliance

Science Business, 16/09/2021: Chips Act on the way to help EU boost semiconductor R&D and manufacturing https://sciencebusiness.net/news/chips-act-way-help-eu-boost-semiconductor-rd-and-manufacturing

Politico, 29/09/2021: France eyes control over chip agenda in EU-US tech alliance https://www.politico.eu/article/france-eu-chips-strategy-control/

Bloomberg, 30/09/2021: EU, U.S. Seek to Avert Chip-Subsidy Race, Float Supply Links https://www.bloomberg.com/news/articles/2021-09-30/eu-u-s-seek-to-avert-chip-subsidy-race-float-supply-links

Reuters, 13/10/2021: Dutch warn against global decoupling in European Chips Act https://www.reuters.com/technology/dutch-warn-against-global-decoupling-european-chips-act-2021-10-13/

Reuters, 14/10/2021: EU appeals to shared values to tempt Taiwan's chip firms https://www.reuters.com/technology/eu-appeals-shared-values-tempt-taiwans-chip-firms-2021-10-14/

EurActiv: Opinion, 10/11/2021: Europe faces surge in demand for leading-edge chips https://www.euractiv.com/section/digital/opinion/europe-faces-surge-in-demand-for-leading-edge-chips/

Bloomberg, 12/11/2021: Chip Shortage Spark War of Words Between Top EU Officials https://www.bloomberg.com/news/articles/2021-11-12/chip-shortage-sparks-war-of-words-between-top-eu-officials

Reuters, 18/11/2021: EU looking to relax rules to allow funding of cutting edge chip plants https://www.reuters.com/world/europe/eu-could-clear-state-aid-chip-production-amid-global-shortage-2021-11-18/

Euronews, 18/11/2021: As tech race heats up, Brussels hints at competition law exception to boost EU-made microchips https://www.euronews.com/2021/11/18/as-tech-race-heats-up-brussels-hints-at-competition-law-exception-to-boost-eu-made-microch

EUObserver, 19/11/2021: EU mulls relaxing state-aid rules to help chip production https://euobserver.com/world/153557

EurActiv, 22/12/2021: With arrival of Intel, Europe to gain advanced chips https://www.euractiv.com/section/digital/news/with-arrival-of-intel-europe-to-gain-advanced-chips/

Science Business, 18/01/2022: When the chips are down: France sets out to win semiconductors ‘battle’ for Europe https://sciencebusiness.net/news/when-chips-are-down-france-sets-out-win-semiconductors-battle-europe

Bloomberg, 04/02/2022: EU Faces Funding, State Aid Hurdles With $48 Billion Chips Act https://www.bloomberg.com/news/articles/2022-02-04/eu-faces-funding-state-aid-hurdles-with-48-billion-chips-act

Politico, 08/02/2022: EU launches Chips Act industrial plan https://www.politico.eu/article/europe-launches-chips-act-industrial-plan/

Deutsche Welle, 08/02/2022: EU unveils multibillion-euro chip production plan https://p.dw.com/p/46gZM

Reuters, 08/02/2022: EU eases state aid rules in multi-billion euro boost for chip sector https://www.reuters.com/technology/eu-lays-out-billion-euro-plan-boost-chip-production-2022-02-08/

Euronews, 08/02/2022: Semiconductors: Brussels wants to plough billions into making more microchips in the EU https://www.euronews.com/2022/02/08/semiconductors-brussels-wants-to-plough-billions-into-making-more-microchips-in-the-eu

Associated Press, 08/02/2022: EU’s chip production plan aims to ease dependency on Asia https://apnews.com/article/joe-biden-technology-business-europe-european-union-309e0cd669f4f5958885beb93d04e8cf

RFI News, 08/02/2022: EU joins chips race with a €42 billion bid to end its dependence on Asia https://www.rfi.fr/en/science-and-technology/20220208-eu-joins-chips-race-with-a-%E2%82%AC42-billion-bid-to-end-its-dependence-on-asia

CityAM, 08/02/2022: EU eases state aid rules in multi-billion euro chip boost as UK risks falling behind https://www.cityam.com/eu-eases-state-aid-rules-in-multi-billion-euro-chip-boost-as-uk-risks-falling-behind/

The Verge, 09/02/2022: EU outlines €43 billion plan to fix Europe’s chip shortage https://www.theverge.com/2022/2/9/22925010/eu-chips-act-plan-43-billion-funding-shortage-supply-chain

Reuters, 09/02/2022: Taiwan sees 'enormous' room for chip cooperation with EU https://www.reuters.com/technology/taiwan-sees-enormous-room-chip-cooperation-with-eu-2022-02-09/

Emerging Europe, 09/02/2022: The EU is pinning its tech hopes on a 43 billion euros ‘Chips Act’ https://emerging-europe.com/business/the-eu-is-pinning-its-tech-hopes-on-a-43-billion-euros-chips-act/

The Guardian, 10/02/2022: ‘Just-in-time to just-in-case’: EU’s $49bn chip plan shows tectonic shift in global economy https://www.theguardian.com/technology/2022/feb/09/eu-hopes-43bn-plan-will-fix-chip-shortages-as-supply-chain-crisis-bites

BBC News, 01/04/2022: Chip shortage: Has Europe's plan arrived too late? https://www.bbc.co.uk/news/business-60554228

Politico, 30/09/2022: NXP warns EU microchips funding falls far behind 2030 targets https://www.politico.eu/article/microchips-maker-nxp-warns-eu-chips-funding-falls-far-behind-its-2030-targets/

Reuters, 14/10/2022: Some EU countries want billion-euro chip plan to also fund current chips https://www.reuters.com/technology/some-eu-countries-want-billion-euro-chip-plan-also-fund-current-chips-2022-10-14/

Politico, 15/11/2022: In the global chips race, EU’s cash engine sputters https://www.politico.eu/article/budget-squabbles-put-eu-on-the-back-foot-in-the-chips-race/

Science Business, 01/12/2022: EU ministers stop €400M of decommitted Horizon Europe money being diverted to the Chips Act https://sciencebusiness.net/news/eu-ministers-stop-eu400m-decommitted-horizon-europe-money-being-diverted-chips-act

The Brussels Times, 12/12/2022: EU gets serious on microchip production amid fears of subsidy race https://www.brusselstimes.com/297331/eu-gets-serious-on-microchip-production-amid-fears-of-subsidy-race

EurActiv, 18/01/2023: EU Parliament’s leading committee readies final position on Chips Act https://www.euractiv.com/section/industrial-strategy/news/eu-parliaments-leading-committee-readies-final-position-on-chips-act/

Science Business, 21/02/2023: Act three: Chips Act heads into negotiation phase https://sciencebusiness.net/news/ICT/act-three-chips-act-heads-negotiation-phase

Reuters, 18/04/2023: EU takes on United States, Asia with chip subsidy plan https://www.reuters.com/technology/eu-agrees-chips-subsidies-plan-eu-industry-chief-says-2023-04-18/

Associated Press (AP News), 18/04/2023: EU nears deal on $47B law to boost computer chip production https://apnews.com/article/eu-semiconductor-chips-c504f175dd53ba37dc63214a7095d11f

Politico, 18/04/2023: EU legislators strike deal on €43B chips plan https://www.politico.eu/article/eu-legislator-strike-deal-e43-billion-plan-boost-chips-production/

Bloomberg, 18/04/2023: EU Advances €43 Billion Plan to Make More Semiconductors https://www.bloomberg.com/news/articles/2023-04-18/eu-negotiators-strike-political-deal-on-43-billion-chips-act?

Euronews, 19/04/2023: EU Chips Act: Leaders strike €43 billion deal to boost semiconductor production in Europe https://www.euronews.com/next/2023/04/19/eu-strikes-deal-to-boost-semiconductor-chip-production

EurActiv, 19/04/2023: EU institutions reach agreement on European Chips Act https://www.euractiv.com/section/industrial-strategy/news/eu-institutions-reach-agreement-on-european-chips-act/

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Official

European Parliament: Legislative Observatory: Procedure File for Proposal on Chips Act (2022/0032(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2022/0032(COD)

European Parliament: Legislative Train Schedule: European Chips Act (semi-conductors) https://www.europarl.europa.eu/legislative-train/theme-a-europe-fit-for-the-digital-age/file-european-chips-act-(semiconductors)

European Commission: 2019-2024 Priorities: European Chips Act https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/european-chips-act_en

European Commission: Blog by Commissioner Thierry Breton, 15/09/2021: How a European Chips Act will put Europe back in the tech race https://ec.europa.eu/commission/commissioners/2019-2024/breton/blog/how-european-chips-act-will-put-europe-back-tech-race_en

European Commission: Press Release, 08/02/2022: Digital sovereignty: Commission proposes Chips Act to confront semiconductor shortages and strengthen Europe's technological leadership https://ec.europa.eu/commission/presscorner/detail/en/ip_22_729

European Commission: European Chips Act - Questions and Answers (8 February 2022) https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_730

European Commission: Speech by Executive Vice-President Vestager on the European Chips Act (8 February 2022) https://ec.europa.eu/commission/presscorner/detail/en/speech_22_888

European Commission: Statement by President von der Leyen on the European Chips Act (8 February 2022) https://ec.europa.eu/commission/presscorner/detail/en/statement_22_866

S&D EP Group: Newsroom, 08/02/2022: European Chip Act is a bold step towards European technological autonomy that should benefit small and medium enterprises, say S&Ds https://www.socialistsanddemocrats.eu/newsroom/european-chip-act-bold-step-towards-european-technological-autonomy-should-benefit-small

EPP EP Group: Newsroom, 08/02/2022: Make Europe the Chips global capital https://www.eppgroup.eu/newsroom/news/make-europe-the-chips-global-capital

Renew Europe EP Group: Newsroom, 08/02/2022: For our future economy, we need to ensure leadership, resilience and autonomy https://www.reneweuropegroup.eu/news/2022-02-08/chips-act-a-future-proof-investment-in-eu-resilience-and-autonomy

European Parliament: ITRE Committee Hearings, 14/07/2022: How a European Chips Act will put Europe back in the tech race https://www.europarl.europa.eu/committees/en/how-a-european-chips-act-will-put-europe/product-details/20220630CHE10441

Council of the European Union: Press Release, 01/12/2022: Chips Act: Council adopts position https://www.consilium.europa.eu/en/press/press-releases/2022/12/01/chips-act-council-adopts-position/

Renew Europe Group: Newsroom, 24/01/2023: European Chips Act: Renew Europe slashes red tape and prioritises faster permitting https://www.reneweuropegroup.eu/news/2023-01-24/european-chips-act-renew-europe-slashes-red-tape-and-prioritises-faster-permitting

EPP EP Group: Newsroom, 24/01/2023: EPP Group improves EU Chips Act https://www.eppgroup.eu/newsroom/news/epp-group-improves-eu-chips-act

S&D EP Group: Newsroom, 24/01/2023: S&Ds: The world industry needs chips and we want them “Made in the EU” https://www.socialistsanddemocrats.eu/newsroom/sds-world-industry-needs-chips-and-we-want-them-made-eu

European Parliament: Headlines, 15/02/2023: Chips Act – the EU’s plan to overcome semiconductor shortage https://www.europarl.europa.eu/news/en/headlines/society/20230210STO74502/

European Parliament: Press Release, 15/02/2023: Semiconductors: MEPs ready to start talks on new law to boost EU chips industry https://www.europarl.europa.eu/news/en/press-room/20230210IPR74801/

Council of the European Union: Press Release, 18/04/2023: Chips Act: Council and European Parliament strike provisional deal https://www.consilium.europa.eu/en/press/press-releases/2023/04/18/chips-act-council-and-european-parliament-strike-provisional-deal/

European Commission: Press Release, 18/04/2023: Commission welcomes political agreement on the European Chips Act https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2045

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