EU nations advance €43bn plan to become chip hub

EU nations advance €43bn plan to become chip hub

Automotive News Europe — 2022-11-24

Automotive Industry

European Union nations agreed to pursue a €43bn plan to jump-start the bloc’s semiconductor production, clearing a key hurdle in its plan to bolster high-tech industry.

The deal was backed Wednesday by EU ambassadors, according to people familiar with the matter.

It would expand the scope of what chip plants are considered “first-of-a-kind” and qualify for state aid, but stops short of allowing all automotive chips to qualify for funds, which some countries had demanded earlier this fall.

The latest version also adds more safeguards for when the EU’s executive arm can trigger an emergency and intervene in companies’ supply chains.

One of the most contentious issues has been the use of EU funds. Member states on 23 November agreed not to reallocate €400m of research funds for semiconductors after countries with small chip industries raised concerns that this money will only benefit big countries like Germany that have larger operations. Ambassadors want the commission to find the money elsewhere.

EU ministers are expected to rubber-stamp Wednesday 23 November deal at a meeting in December.

The European Parliament needs to approve its own plan before the three institutions can negotiate a final agreement.

The EU has an ambitious goal of producing 20% of the world’s semiconductors by 2030.

The European Commission announced a plan, called the EU Chips Act earlier in 2022, which anticipates around €43bn going toward the semiconductor industry on the continent, including research and production.

While the plan will not be finalized until next year, a number of companies have already announced new semiconductor manufacturing sites, including Intel, GlobalFoundries, STMicroelectronics and Infineon Technologies.