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Core Things reported on February 9 that on Tuesday, the European Commission's long-brewed "A Chips Act for Europe" was finally officially introduced!
The 22-page bill, which was prepared last year, plans to invest more than 43 billion euros (312.6 billion yuan) to boost Europe's chip industry and reduce Europe's dependence on American and Asian companies.
European Commission President Ursula von der Leyen said in a statement that the European Chip Act will link research, design and testing and coordinate EU and national investment.
The bill adds more than €15 billion in public and private investment by 2030, adding 30 billion euros in the EU budgets such as NextGenerationEU and Horizon Europe to the 30 billion euros already committed.
In the short term, the European Chip Act plans to strengthen manufacturing activities in the EU, supporting expansion and innovation across the value chain to address security of supply and a more resilient ecosystem.
In the medium term, the Bill aims to strengthen manufacturing activities in the EU, support the expansion and innovation of the entire value chain, address supply security issues and build a more resilient ecosystem.
In the longer term, the European Chip Act will maintain Europe's technology leadership while preparing the necessary technical capabilities to support knowledge transfer from the lab to the factory and positionIng Europe as a technology leader in the downstream market for innovation.
First, the three main components, and strive for the comprehensive development of the semiconductor industry chain
The European Chip Act consists of three main components, namely the European Chip Initiative, the new framework to ensure supply security, and the EU-level coordination mechanism, as follows:
1. The European Chip Initiative, a "Joint Chip Commitment" that will be strengthened through the strategic repositioning of existing joint commitments on key digital technologies, bringing together resources from the EU, Member States and third countries and the private sector related to existing EU programmes.
The €11 billion will be used to strengthen existing research, development and innovation to ensure the deployment of advanced semiconductor tools, as well as prototyping, testing and piloting production lines for new devices for innovative real-life applications, as well as to build advanced technical and engineering capabilities in quantum chips.
The initiative will also support a network of competence centers across Europe to increase internship opportunities, raise staff awareness and deepen their understanding of the semiconductor ecosystem and value chain, and support dedicated master's and doctoral scholarships, also aimed at increasing women's participation.
2, a new framework to ensure supply security by attracting investment and increasing production capacity, which is urgently needed for the vigorous development of advanced node innovation and energy-saving chips. In addition, the Chips Fund will provide financing channels for start-ups, helping them mature and innovate and attract investors. It will also set up a dedicated semiconductor equity investment fund under InvestEU to support scale-ups and SMEs to mitigate their market expansion.
In order to attract investment, the proposed regulations provide definitions for two types of facilities that are considered to contribute to the security of supply in Europe. These facilities are the so-called "open EU manufacturing plants", which mainly design and produce parts for other industrial enterprises, and the so-called "integrated production facilities", that is, factories that design and produce parts and components that serve the domestic market.
Such a facility would be "unprecedented" in Europe, and its operators should be committed to continuing to invest in innovation in the EU semiconductor industry. The regulations will allow for expedited authorization to construct and operate these facilities in Member States. In assessing the national assistance of member States, the Commission will take into account, as appropriate, the positive impact of these facilities on the European ecosystem.
▲Europe's market share in parts of the global semiconductor supply chain
3. Coordination mechanism between Member States and the Committee to monitor semiconductor supply, estimate demand and forecast shortages. It will monitor the semiconductor value chain by gathering critical intelligence from businesses to identify key weaknesses and bottlenecks. It will bring together common crisis assessments and coordinate actions that will be taken from a new emergency toolbox. It will also make full use of the means of States and the EU to work together for a swift and decisive response.
In addition, the European Commission has made a side recommendation to Member States to joint crisis assessments and coordinated responses. It was an immediate tool that enabled the coordination mechanism between the Membership and the Committee to begin immediately. This will allow for timely and appropriate crisis responses to be discussed and decided from now on.
As a next step, the European Commission encourages Member States to immediately begin coordination work in line with the recommendation to understand the current state of the semiconductor value chain across the EU, anticipate potential disruptions, and take corrective action to overcome the current shortage until the regulation is passed.
If adopted, the chip regulation will apply directly to the entire European Union.
Why is the EU urgently legislating to develop the chip industry?
Europe's strengths and weaknesses in the global semiconductor ecosystem are now clear.
On the one hand, it brings together a number of excellent universities and research institutions, which are in a leading position in the production technology of some of the most advanced chips in the world, and have a favorable position in the field of materials and equipment upstream of chip manufacturing.
On the other hand, 1 trillion microchips were manufactured globally in 2020, with Europe accounting for less than 10% of them and relying heavily on third-country suppliers. If global supply chains are severely disrupted, chip reserves in some industrial sectors in Europe could be depleted within a few weeks, bringing many European industries to a standstill.
Over the past two years, as the economy recovered from the COVID-19 pandemic, supply chain bottlenecks have emerged in the semiconductor industry, leading to the closure of factories around the world in a range of industries, from automotive to medical devices. In Europe, some consumers have to wait nearly a year to buy a car due to a lack of spare parts. This exposes the fragility of the chip ecosystem in Europe and the rest of the world.
In order to strengthen Europe's leadership in the semiconductor sector, the European Chip Act aims to achieve 5 goals:
1. Strengthen Europe's research and technology leadership in smaller, faster chips;
2. Develop a framework to increase the share of production capacity in the global market to 20% by 2030 (this means doubling the existing market share of EU countries);
3. Establish and strengthen innovative capabilities in advanced chip design, manufacturing and packaging;
4. Have an in-depth understanding of the global semiconductor supply chain;
5. Address skills shortages, attract new talent, and support the emergence of a skilled workforce.
By 2030, there will be a total of more than €43 billion in policy-driven investment in support of the European Chip Act, which will be widely complemented by long-term private investment. The bill proposals include:
1. Investment in next-generation technologies;
2. Provide design tools and pilot production lines for prototype design, testing and experimentation of cutting-edge chips throughout Europe;
3. Certification procedures for energy-saving and trusted chips to ensure the quality and safety of key applications;
4. A framework that is more conducive to investors to establish production facilities in Europe;
5. Support innovative entrepreneurship, large-scale, and equity financing for small and medium-sized enterprises;
6. Cultivate skills, talents and innovation capabilities in microelectronics;
7. Tools for predicting and responding to semiconductor shortages and crises to ensure supply security;
8. Establish international partnerships in semiconductors with like-minded countries.
Third, the local chip industry, Europe has been planning for a long time
The European Commission believes that the European Chip Act is a milestone for Europe, which will benefit its industry, economy and society, provide highly skilled jobs and new markets for European companies, help Europe gain geopolitical independence, become a major player in the global semiconductor ecosystem, and provide the world with a diversified and resilient supply chain.
In fact, back in last year's State of the Union address, European Commission President Ursula von der Leyen had laid out a vision for a European chip strategy to jointly create a state-of-the-art European chip ecosystem that would include production, as well as connecting the EU's world-class research, design and testing capabilities. (The EU is really moving!) Will push the "European Chip Law" to enhance technical sovereignty)
In September 2021, von Derryn delivered a State of the Union address
In July 2021, the European Commission launched the Processor and Semiconductor Industry Alliance with the aim of identifying the current gaps in microchip production and the technological developments needed for companies and organizations, regardless of their size, to thrive.
The alliance will help foster cooperation between existing and future EU initiatives and play an important advisory role, providing a strategic roadmap for the European Initiative Chip, as well as other stakeholders.
To date, in a joint statement signed in December 2020, 22 member states have committed themselves to working together to support Europe's electronic and embedded systems value chain and strengthen cutting-edge manufacturing capabilities.
These new measures will help Europe achieve its goal of the "Digital Decade 2030", which is to occupy 20% of the global chip market by 2030, sprint 2nm production capacity and achieve 10 times the energy efficiency it has today. (Europe is in a hurry, officially launched a 2nm chip general attack!) ）
Along with the publication of the European Chip Act, the European Commission has also published a survey of target stakeholders to gather detailed information on current and future chip and wafer needs. The findings will help better understand how chip shortages are affecting European industry.
Conclusion: Chips – the core strategic assets of digital transformation
Globally, the EU's legislative move is the same as the actions of US President Joe Biden after taking office, and Biden is also pushing for the formulation of the $52 billion US Chip Act to consolidate and strengthen the us domestic chip production power.
It can be seen that as a key strategic asset, chip supply is extremely dependent on a very limited number of participants, and the realization of independent control of the local semiconductor industry chain is increasingly valued by countries around the world. This core industry, which is at the center of geopolitical interests, is constraining countries' ability to drive digital transformation.
Source: Official website of the European Commission