Orange with Media Services, published on Friday, February 04, 2022 at 7:00 p.m.
A 42 billion euro project, unveiled in Brussels on Tuesday, plans to massively develop the semiconductor industry by 2030.
The EU wants to double its world market share in this strategic sector, which is very subject to shortages. “This is an extremely important moment for Europe, because for the first time it is changing the rules on competition policy, in particular state aid”, explained Internal Market Commissioner Thierry Breton, who is leading the project.
EU executive chairwoman Ursula von der Leyen has set the target of doubling the EU’s market share in semiconductors to 20% of global production by the end of the decade, to reduce dependence on Asia.
In a market which should itself double, this means a fourfold increase in production on European territory.
To do this, the Commission will validate massive public support on Tuesday. The draft regulation, which will still have to be adopted by the member countries and the European Parliament, reflects the new desire to have an interventionist industrial policy on a continent very open to competition.
Brussels is planning 12 billion euros in subsidies (6 billion from the EU and 6 from member states) to fund research into the most innovative chips and pilot lines to prepare for their industrialization.
To allow the establishment of very large factories, but also to encourage innovation within smaller companies, it will also authorize 30 billion euros in public aid from the Member States to manufacturers in the sector, including including foreign groups, such as the American Intel, which plans to invest in Europe. These public funds should trigger an even greater amount of private investment, the Commission hopes.
Security of supply
“The EU will equip itself with the means to guarantee its security of supply, as the United States does for example”, including with possible export restrictions in the event of a crisis, said Thierry Breton. “Europe remains an open continent, but on its terms,” he summed up, referring to a “paradigm shift”. Such a policy would have been impossible when the UK was still in the EU, he said.
Indispensable in everyday objects such as cars or mobile phones, semiconductors have been subject to shortages for almost three years. Recently, many factories have seen their activity blocked in the EU, which has become increasingly subject to imports. The European Union depends in particular on Taiwan for more than half of its needs, underlined Thierry Breton. Hence a major economic risk, for example if a military conflict arises with China. “If Taiwan were no longer able to export, almost all the factories in the world would stop in three weeks,” he warned.
According to him, the pandemic, and the supply disruptions it has caused in terms of masks or vaccines, has raised awareness among Europeans.
