Semiconductors: EU prepares 42 billion euro recovery plan – zimo News


Brussels is to unveil a project on Tuesday to authorize 42 billion euros of public investment to support the semiconductor industry by 2030, doubling its global market share in a strategic sector facing a shortage.

“This is an extremely important moment for Europe because it is the first time that the rules of competition policy, especially state aid, have been changed,” Thierry Breton, the internal market commissioner in charge of the project, told reporters on Friday.

EU executive president Ursula von der Leyen has set a goal of doubling the EU’s market share in semiconductors to 20% of global production by the end of the century in order to reduce reliance on Asia . In a market that should itself double, this means a fourfold increase in production on European soil.

To that end, the committee will verify massive public support on Tuesday. The draft regulation, still to be passed by member states and the European Parliament, reflects a new desire for interventionist industrial policies in a continent that is very open to competition.

Brussels plans to provide 12 billion euros in subsidies (6 billion from the EU, 6 from member states) to fund research on the most innovative chips and pilot lines in preparation for their industrialization.

To allow the creation of very large factories, while also encouraging innovation by small companies, it will also authorize member states to provide 30 billion euros in public aid to manufacturers in the industry, including foreign groups, such as US Intel, which plan to invest in Europe.

The committee hopes that these public funds should spark more private investment.

EU Internal Market Commissioner Thierry Breton, in Brussels on 26 January 2022 (AFP/Archives – JOHN THYS)

Thierry Breton said “the EU will equip itself with the means to secure supply, as the US has done”, including possible export restrictions in the event of a crisis.

“Europe remains an open continent, but in terms of its conditions,” he concluded, referring to a “paradigm shift”. Such a policy was impossible when Britain was still in the EU, he said.

Semiconductors, which are indispensable in everyday items like cars or mobile phones, have been in shortage for nearly three years. Recently, the activities of many factories in the EU have been restricted, and EU imports have been increasing.

Mr Breton stressed that more than half of the EU’s needs depend on Taiwan in particular. So there are significant economic risks, such as a military conflict with China. “If Taiwan is no longer able to export, almost all of the world’s factories will shut down within three weeks,” he warned.

According to him, the pandemic and the supply disruptions it has caused in terms of masks or vaccines have raised awareness among Europeans.

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