The Chips Act: three pillars for semiconductor security
The European Commission has recently proposed a set of measures to ensure the EU's security of supply, resilience, technological leadership and autonomy in semiconductor technologies and applications in order to prevent, prepare, anticipate and respond to future crises and supply chain disruption. The European Chips Act is intended to strengthen Europe's competitiveness and resilience, contributing to the achievement of the digital and green transitions and ensuring the solidity and sustainability of key European vertical domains and associated value chains. The Chips Act is expected to mobilise 43 billion euros of public and private investments, focusing on three pillars: (i) the Chips for Europe Initiative, (ii) a new framework to ensure security of supply and (iii) a mechanism to monitor the semiconductor supply chain.
(i) The Chips for Europe Initiative will extend the existing Key Digital Technologies Joint Undertaking to strengthen existing R&D&I, including the deployment of advanced semiconductor tools, pilot lines for prototyping, testing & experimentation, staff training and the development of a comprehensive understanding of the semiconductor ecosystem and the EU application value chains relying on it.
(ii) The new framework to ensure security of supply and enhance innovation capacities covers the needs of advanced nodes and energy-efficient chips on the basis of new frontier technologies that will be developed in the next five to ten years. This pillar will also be supported by a Chips Fund to facilitate the inclusion and development of start-ups and a dedicated equity investment facility under InvestEU to support SMEs in their market expansion.
(iii) Finally, the mechanism to monitor the semiconductor supply chain will be based on the coordination between the Member States and the Commission and is expected to estimate demand/offer and anticipate future shortages. The monitoring activities will rely on key intelligence from companies in order to map weaknesses & bottlenecks in the supply chain and will allow for the assessment & anticipation of future crises and the identification of the required corrective actions.
The Chips Act is currently under discussion in the European Council and Parliament and is intended to be approved by the end of 2022. Inside will keep you informed on the further updates in future editions of the magazine.