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EU Stands Up to Semiconductor Shortage with European Chips Act

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The pandemic presented myriad challenges for the enterprise, with the supply chain taking center stage. Creating a connected world requires a herculean effort. In the “digital era” semiconductor shortages prove quite prohibitive, the EU is circling the wagons to ensure history doesn’t repeat.

This week, the European Chips Act went into action, offering €43 billion euros of public and private investments specifically aimed at empowering Europe by leveraging its research capabilities, while coordinating EU and national investment in the value chain to stabilize further supply chain disruption.

Putting reliance on manufacturers in a controversial nation-state, like China for instance, is simply not tenable. The Commissions sees the initiative as a means to support military, economic and industrial excellence, viewing chips as a vital piece of the value chain.

Emerging markets like autonomous vehicles, connectivity (5G/6G), cloud, IoT, computing capacity, supercomputers are reliant on semiconductors, offering fertile ground to attain the program’s stated goal of doubling EU’s current market share to 20% by 2030.

The wheels were set in motion during European Commission President Ursula von der Leyen’s 2021 State of the Union speech, painting of picture of a “state-of-the-art European chip ecosystem,” through joining world class research, design, testing and production capabilities  

Leyen explained this week, “The European Chips Act will be a game changer for the global competitiveness of Europe's single market. In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions. And in the mid-term, it will help make Europe an industrial leader in this strategic branch.”

There are three pillars to the European Chips Act. The Ships for Europe initiative creates a community resources pool collected from program stakeholders – Member States, the Union, private sector and other participating countries. Right off the bat, €11 billion euro is available to improve research, development and innovation, laying the groundwork for future success with the necessary training, tools and applications.

Secure the supply by attracting investment and driving improvement in production capabilities – queue Industry 4.0 – to create more efficient, innovative and sophisticated chips. Start-ups earn access to a Chips Fund, assisting as an accelerator in attracting investment and developing a mature solution, as well as additional tools for business seeking scale. 

The final core piece is a coordination mechanism for Member States and the Commission to keep tabs on semiconductor supply, calculating future demand and proactively avoiding future shortfalls. In addition, an “emergency toolbox” provides common crisis assessment, coordinate next best action at a national or Union level, and sidestep possible bottlenecks and value chain hiccups via supply chain in

“With the European Chips Act, we are putting out the investments and the strategy. But the key to our success lies in Europe's innovators, our world-class researchers, in the people who have made our continent prosper through the decades,” Leyen continued.

This is an unprecedented time for the world. And for the EU to ensure continued economic growth, it required unprecedented action.

Learn more about IoT, 5G/6G, semiconductors and so much more at IoT Evolution Expo June 21-24 in Fort Lauderdale, Florida. See you there!




Edited by Luke Bellos
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