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Europe needs to start producing its own chips again!

Semiconductor chips are essential for basically all kinds of electronic devices, from laptops and smartphones to medical devices and modern cars.

Cutting-edge technologies and research enable us to produce all of these devices in Europe, but when it comes to chip supply, we are dependent on Asian imports. In 2021, mainly because of the COVID-19 pandemic, there was a massive disruption in the supply of semiconductor components, which completely paralyzed certain industries.   This made Europe feel the impact of its extreme dependency on a limited number of third-country chip suppliers since the continent is only self-sufficient in producing 10 % of these specific but indispensable components. However, European companies were responsible for producing 44 % of all chips globally as recently as 1990. Now we need to return semiconductor chip production to Europe.

The new European Chips Act is supposed to provide at least a partial solution. Its goal is to double the EU’s share in the chips market to 20 % by 2030.   It aims to do this by expanding research, innovation, and production collaboration and focusing on producing the most technologically sophisticated and energy-efficient semiconductor components, thus boosting the EU’s competitiveness and making it a stronger global player in the field of innovation and technology.

However, the current financial envelope of 43 billion EUR (over 1 trillion crowns) will definitely not suffice. Building a single modern chips production plant costs around 20 billion EUR, which means the funds would be better invested in development and research. Europe is already a global leader in certain research fields – as illustrated by the Dutch ASML, which develops photolithography systems for computer chips. However, since building and operating production plants in Europe is much more expensive than in Asia, we need to provide much more funding to the production companies to motivate them to move their production here. If we really want to have a digital and green Europe by 2030, we have to offer much more support to this type of technological innovation. I will therefore push for a significant increase in the European Chips Act funding!

 

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