Last Update: April 19, 2023, 01:14 AM IST
The European Parliament and EU member states reached an agreement on Tuesday on a plan to boost supplies of semiconductors to Europe, as the bloc races to reduce its reliance on Asian suppliers.
EU prioritizes local chip production after corona virus The pandemic has jolted the supply chain which has led to significant shortages.
Asian industry, especially companies from China and Taiwan, currently dominate the manufacture and export of semiconductors.
EU chief Ursula von der Leyen said the deal “will allow a competitive chips industry and lay the foundation for global market share. It will power a clean tech industry made in Europe and strengthen our digital resilience and sovereignty.” “
Under the provisional political agreement, the EU aims to double its current global market share to 20 percent in 2030 and 43 billion euros ($47.2 billion) in public and private investment to feed Europe’s growing appetite for chips. To collect more than
To meet this target, Europe would have to quadruple its production.
Funding would come from existing EU budget money and the deal would also loosen state aid rules to spend the money on developing centers to produce the key ingredient.
The EU will also raise 3.3 billion euros for research and development, and the deal includes a system to monitor supply shortfalls to act in times of crisis.
The legislative text is also part of the bloc’s bid to produce more in Europe to reduce its vulnerability to geopolitical shocks such as the war in Ukraine.
When Russia invaded Ukraine last year, the European Union rushed to find alternative energy sources after years of relying on Russian fossil fuels.
“This will allow us to reduce our collective dependence on Asia, rebalance and secure our supply chains,” EU Industry Commissioner Thierry Breton said in a statement after reaching an agreement between Parliament and the European Council. “
– Hungry for chips –
Europe was under pressure to act fast.
In August, the United States approved its own Chips and Science Act that included nearly $52 billion to boost the production of microchips and another ten billion dollars for scientific research and development.
Japan and South Korea have also vowed to spend billions on developing their countries’ semiconductor production.
Washington has this year leaned on allies including Japan and the Netherlands to curb exports of semiconductor technology to China, much to Beijing’s chagrin.
French-Italian chipmaker STMicroelectronics, US-based GlobalFoundries and US tech giant Intel said last year they would pour billions into new production sites in France and Germany. They will now be able to get state subsidies for their projects.
Brussels is racing to protect the bloc’s competitive edge in the face of threats from China and the United States, which have invested billions in green technology.
Last month, the EU’s executive branch published two proposals to push Europe to produce more clean technology, including the raw materials needed to make batteries for electric vehicles.
“Europe aims to be an industrial powerhouse in the markets of the future – digital and clean technologies that will allow us to remain a competitive export force, create quality jobs and ensure our security of supply,” Breton said.
“Because there will be no green or digital transformation without a strong manufacturing base,” he added.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)