“We have a deal on [the] EU Chips Act,” EU Commissioner Thierry Breton tweeted after the European Parliament and Council reached a provisional political agreement on the Chips Act.

 

EU Flag Chips

This agreement represents a new milestone in Europe’s efforts to catch up with other regions in semiconductor production and build a resilient supply chain. The EU Chips Act aims to create the conditions for the development of an industrial base capable of doubling the EU’s global market share in semiconductors from 10% to at least 20% by 2030. 

 

Since its introduction on Feb. 8, 2022, the EU Chips Act has been moving through the EU’s normal legislative process. First, the European Council adopted its position, or “general approach,” on the Chips Act on Dec. 1, 2022. Then the European Parliament’s Committee on Industry, Research and Energy (ITRE) voted to approve the legislative proposals for the Chips Act on Jan. 24, 2023.

 

The agreement reached today (April 18) involves compromises on two of the three Chips Act pillars.

 

Pillar 1: The “Chips for Europe Initiative” to support large-scale technological capacity building

 

The compromise strengthens the competencies of the Chips Joint Undertaking, which will be responsible for the selection of the centers of excellence, as part of its work program.

 

The Chips for Europe Initiative is expected to mobilize €43 billion in public and private investments, with €3.3 billion coming from the EU budget.

 

Pillar 2: A framework to ensure security of supply and resilience by attracting investment

 

The compromise expands the scope of so-called “first of its kind” facilities to include those that produce equipment used in semiconductor manufacturing.

 

The compromise also emphasizes the importance of international cooperation and the protection of intellectual property rights as two key elements for the creation of a semiconductor ecosystem.

 

Pillar 3: A Monitoring and Crisis Response system to anticipate supply shortages and provide responses in case of crisis

 

Semiconductor market size forecast by application (in $ billion)

Semiconductor market size forecast by application (in US$billion) 

(Source: Council of the European Union)

Industry voices

 

First thing this morning, Breton had sharpened our curiosity by tweeting with humor, “Today could be an amazing day as the EU Parliament and Council might say: ‘YES, I DO’ to the EU Chips Act.”

 

After the deal was passed, Breton adopted a more formal tone and tweeted, “In a geopolitical context of de-risking, Europe is taking its destiny into its own hands. By mastering the most advanced semiconductors, the EU will become an industrial powerhouse in markets of the future.”

 

Reactions from the industry are starting to come. In a statement, Frank Bösenberg, managing director of Silicon Saxony, said, “The law has been passed. The EU Chips Act creates investment and planning security for semiconductor companies and their suppliers. Above all, the European supplier industry in the areas of chip design, chemicals, wafer and mask production and automation will be strengthened. In addition, Europe is demonstrating its ability to act. The law is an important building block for European industrial policy and a good basis for further legislative initiatives to strengthen investments in the areas of artificial intelligence, quantum computing and communication technologies.”

 

Semi Europe also applauded the provisional agreement. In a statement, Laith Altimime, president of Semi Europe, declared, “Now is the time to invest in the semiconductor sector in Europe. The European Chips Act strengthens the continent’s appeal as a destination for semiconductor industry investment and lays the groundwork for the growth of the entire ecosystem. The act will help create a more favorable environment for chip industry investments in Europe and promises to spark greater innovation.”

 

In early March, Semi Europe had presented its recommendations to the European Commission, Parliament and Council in a document entitled “Semi Europe Priorities for the European Chips Act Trilogue Negotiations.”

 

Toward adoption

 

Now that the Council and the European Parliament have reached a provisional agreement, both institutions will have to ensure it is finalized, endorsed and formally adopted.

 

Once the Chips Act is adopted, the Council will pass an amendment of the Single Basic Act (SBA) for institutionalized partnerships under Horizon Europe to allow the establishment of the Chips Joint Undertaking. The SBA amendment is adopted by the Council following consultation of the Parliament.