The European Council has approved Tuesday (July 25) the European Union (EU) Chips Act, which aims at strengthening the continent's semiconductor ecosystem.
The legislation's purpose is to create the conditions for the development of a European industrial base in the field of semiconductors, attract investment, promote research and innovation, and prepare Europe for any future chip supply crisis.
In this regard, the program should be able to mobilize €43 billion ($47.5 billion) in public and private investment, with €3.3 billion ($3.6 billion) of it coming from the bloc's budget, to increase the EU's cut of microchip production from its current 10% rate to 20% by 2030.
The semiconductor industry is projected to value $1 trillion by 2030, which would be spearheaded by segments like smartphones, servers, data centers, and storage applications.
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EU Chips Act Set to Put Europe on Top, Spanish Official Says
By approving the Chips Act, the EU might reduce some of its reliance on foreign entities, like China, to produce semiconductors, as per Engadget.
Spanish Minister for Industry, Trade, and Tourism Héctor Gómez Hernández said the Chips Act would help Europe become a "frontrunner" in the world semiconductors race, with new production plants, new investments, and new research projects in the pipeline in the near future.
The EU's final approval of the Chips Act followed US President Joe Biden's signing of the CHIPS and Science Act in 2022, which made $52 billion in funding and tax credits available to the US's own semiconductor industry, with $39 billion of which set aside for semiconductor manufacturing initiatives. Applications for chip innovation funding began in the Spring of 2023.
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