The EU Chips Act: heading a global tech race that is fair to all EU industries

Pivotal to numerous geostrategic interests, semiconductors are at the heart of the global technological race, “one that Europe cannot miss,” commented Paolo Falcioni, APPLiA Director General.

Pivotal to numerous geostrategic interests, semiconductors are at the heart of the global technological race, “one that Europe cannot miss,” commented Paolo Falcioni, APPLiA Director General. Vital to a wide range of digital transformations, the impending worldwide shortage of chips has already established a consolidated trend that risks having serious consequences on the European economy, impacting on the supply of a variety of goods, including home appliances. 

The white goods sector in Europe is, in fact, heavily dependent on the imports of semiconductor technologies, a tactical component of the industry chain at both the EU and global level. In this regard, Falcioni stressed how the European Chips Act released today by the European Commission, “marks a step in the right direction,” paving the way for strengthened EU industrial leadership and capacity. To this end, in a major push for Europe to gain momentum in the global semiconductor design and manufacturing ecosystem, “securing chip availability for all uses remains of utmost importance,” he continued, underlining the need to create a robust manufacturing environment that could deliver semiconductors to all European companies, equally. In a nutshell, Europe should foster the development of next generation technologies, in the nanometer range, while ensuring chip designs ranging up to  50 mm, this way “establishing a level playing field for all sectors relying on the use of chips, in Europe.”

Counting on only 10% of market share in global semiconductors, European companies have already suffered the implications of the impending shortage, facing alterations in the production processes, supply chains and after-sales services. As a result, this also contributed to delaying the industry in fulfilling a number of legislative requirements, in order to balance out the loss on the competitive edge. Therefore, ensuring continued value for the EU economy calls for the adoption of imminent measures to tackle the challenge both in the short and long run. 

With global production set to double by 2030, establishing technological sovereignty is critical for Europe to enable its ambitious digital and green transition. In this sense, “the Act shall lay the foundations for a harmonised European strategy, leveraging national efforts at the EU Member State-level and avoiding a race to national subsidies for microchip plants, which would risk triggering the fragmentation of the Single Market,” detailed APPLiA’s DG. 

Sitting alongside equivalent initiatives adopted at the global level, by the U.S. and China for instance, the Act aims to create more balanced interdependencies and to pave the way for Europe to grow stronger in the whole value chain. For this to happen, “it is key for Europe to square the circle of technological sovereignty and EU competitiveness, making sure no one is left behind.”