EU needs to update Chips Act and provide more support, semiconductor body says

3 September 2024, 16:37 published

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The European Union has been urged to update its Chips Act with a revised 2.0 version in a bid to boost the continent’s semiconductor industry.

The push comes from the European Semiconductor Industry Association (ESIA) in light of ongoing geopolitical tensions and increased competition.

The ESIA highlighted the need for a more strategic approach to chip policy under the incoming EU Commission, asking for fewer export restrictions and more readily available aid.

ESIA calls for more chip support

In a statement (via Reuters), the ESIA stated: “A dedicated ‘Chips Envoy’ responsible for the overall industrial policy approach to semiconductors is a necessity.”

The ESIA represents the likes of Infineon, STMicroelectronics, NXP, ASML, imec, Fraunhofer and CEA-Leti

This comes in response to an April 2023 Chips Act, which included a €43 billion subsidy plan to help increase Europe’s share of the global chip market to one-fifth by the end of the decade. For four decades, Europe has maintained around 15% share in the global market.

Since the first act, delays such as the postponement of Intel’s Magdeburg project have raised concerns about its effectiveness. Pending EU aid approval is to blame for the delay.

The ESIA also acknowledged the need for security, calling for “a more positive approach” focused on support and incentives rather than restrictions when it comes to export policies. Netherlands-headquartered ASML has faced such restrictions on some of its products destined for China in line with EU and US policies that have been put in place to hinder China’s technological and military advancements.

In response, China has been circumventing restrictions by buying legacy hardware, however the country has been unable to obtain ASML’s newer products under the export restrictions.

Looking ahead, Dutch Prime Minister Duck Schoof indicated that the government will consider ASML’s impact on the country’s economy: “ASML is for the Netherlands an extremely important, innovative industry that should not suffer under any circumstances, because that would damage ASML’s global position.”