Released February 21, 2022 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Union (EU) has announced billions of euros and a new strategic plan to make it easier for technology companies to build or expand semiconductor plants in the region.
The move is designed to reduce the region's heavy reliance on chips from Asia and the U.S. as well as combat chronic chip shortages over the past year that have hurt numerous European manufacturing sectors, including automotive, health care, information technology, smartphones, energy, defence and industrial automation. The EU admitted that the COVID-19 pandemic had "exposed a weakness in the ecosystem within both Europe and other regions in the world" experiencing significant shortages of chips.
The European Commission (EC) has introduced the European Chips Act, backed by 15 billion euro (US$17 billion) in additional public and private investment until 2030. This comes on top of 30 billion euro (US$34 billion) of public investments that it has already planned. Within the Act, the Chips for Europe Initiative will pool 11 billion euro (US$12.4 billion) to advance semiconductor projects. The planning process will be fast-tracked in Member States for new grassroot facilities and expansions of existing plants. Industrial Info is currently tracking 18 active semiconductor plant projects in Europe worth more than US$24 billion.
The Commision highlighted that chip shortages had forced factory closures in a wide range of sectors from cars to health care devices. In the car sector, for example, production in some Member States decreased by one-third in 2021. While Europe has a thriving and innovative technology research and development sector, its share of the overall global semiconductors production market is less than 10% and is heavily dependent on third-country suppliers. The goal is for the EU to double its current market share to 20% by 2030. It noted, however, that at present that Europe's chips' reserves in some industrial sectors--automotive or healthcare devices--"could run out in a few weeks, bringing many European industries to a standstill."
European Commission president, Ursula von der Leyen, explained: "Chips are at the centre of the global technological race...and also the bedrock of our modern economies. They are essential for the goods that we use on an everyday basis -- we have them in our smartphones; we have them in our washing machines. During the pandemic, for example, we needed them crucially in the life-saving ventilators. Or now, for example, with the energy topic, they are in the electric grids. So the chips are crucial in almost every device. But the pandemic has also painfully exposed the vulnerability of chip supply chains. You all know that the global shortage of chips has really slowed down our recovery. We have seen that whole production lines came to a standstill, for example with cars. While the demand was increasing, we could not deliver as needed because of the lack of chips."
She added: "So this European Chips Act comes absolutely at the right time. And it has two main goals: The first goal is, in the short term, to increase our resilience to future crises by anticipating and thus avoiding supply chain disruptions. And the second part is, of course, looking at the mid-term, and there to make Europe an industrial leader in this very strategic market."
Chip giant Intel Corporation (NASDAQ:INTC) (San Francisco, California) welcomed the news: "The proposal is a catalyst for future EU-wide critical R&D and manufacturing investments from Intel and others in the semiconductor industry. Intel has been manufacturing chips in the EU for more than 30 years. Since 1989, we have invested 18 billion in European production and we employ over 10,000 employees across 20 European countries. We are currently considering a significant increase in our European footprint, and we expect that the EU Chips Act will facilitate these plans. It is imperative that the EU and U.S. join forces to invest in the semiconductor ecosystem for the sake of our collective economic stability and supply chain security."
Intel has already stated that it has plans to invest up to 80 billion euro (US$90.5 billion) in building new European chip plants focusing on next-generation microchips measuring two nanometres and smaller. Locations in Germany, France and Poland have been suggested, but the company has yet to commit.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The move is designed to reduce the region's heavy reliance on chips from Asia and the U.S. as well as combat chronic chip shortages over the past year that have hurt numerous European manufacturing sectors, including automotive, health care, information technology, smartphones, energy, defence and industrial automation. The EU admitted that the COVID-19 pandemic had "exposed a weakness in the ecosystem within both Europe and other regions in the world" experiencing significant shortages of chips.
The European Commission (EC) has introduced the European Chips Act, backed by 15 billion euro (US$17 billion) in additional public and private investment until 2030. This comes on top of 30 billion euro (US$34 billion) of public investments that it has already planned. Within the Act, the Chips for Europe Initiative will pool 11 billion euro (US$12.4 billion) to advance semiconductor projects. The planning process will be fast-tracked in Member States for new grassroot facilities and expansions of existing plants. Industrial Info is currently tracking 18 active semiconductor plant projects in Europe worth more than US$24 billion.
The Commision highlighted that chip shortages had forced factory closures in a wide range of sectors from cars to health care devices. In the car sector, for example, production in some Member States decreased by one-third in 2021. While Europe has a thriving and innovative technology research and development sector, its share of the overall global semiconductors production market is less than 10% and is heavily dependent on third-country suppliers. The goal is for the EU to double its current market share to 20% by 2030. It noted, however, that at present that Europe's chips' reserves in some industrial sectors--automotive or healthcare devices--"could run out in a few weeks, bringing many European industries to a standstill."
European Commission president, Ursula von der Leyen, explained: "Chips are at the centre of the global technological race...and also the bedrock of our modern economies. They are essential for the goods that we use on an everyday basis -- we have them in our smartphones; we have them in our washing machines. During the pandemic, for example, we needed them crucially in the life-saving ventilators. Or now, for example, with the energy topic, they are in the electric grids. So the chips are crucial in almost every device. But the pandemic has also painfully exposed the vulnerability of chip supply chains. You all know that the global shortage of chips has really slowed down our recovery. We have seen that whole production lines came to a standstill, for example with cars. While the demand was increasing, we could not deliver as needed because of the lack of chips."
She added: "So this European Chips Act comes absolutely at the right time. And it has two main goals: The first goal is, in the short term, to increase our resilience to future crises by anticipating and thus avoiding supply chain disruptions. And the second part is, of course, looking at the mid-term, and there to make Europe an industrial leader in this very strategic market."
Chip giant Intel Corporation (NASDAQ:INTC) (San Francisco, California) welcomed the news: "The proposal is a catalyst for future EU-wide critical R&D and manufacturing investments from Intel and others in the semiconductor industry. Intel has been manufacturing chips in the EU for more than 30 years. Since 1989, we have invested 18 billion in European production and we employ over 10,000 employees across 20 European countries. We are currently considering a significant increase in our European footprint, and we expect that the EU Chips Act will facilitate these plans. It is imperative that the EU and U.S. join forces to invest in the semiconductor ecosystem for the sake of our collective economic stability and supply chain security."
Intel has already stated that it has plans to invest up to 80 billion euro (US$90.5 billion) in building new European chip plants focusing on next-generation microchips measuring two nanometres and smaller. Locations in Germany, France and Poland have been suggested, but the company has yet to commit.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
