The negotiators of the European Council and the European Parliament reached an agreement last Tuesday in Strasbourg to establish the bases of the new European Chip Lawwhich will involve an investment of 43,000 million euros ($47.2 billion), thus doubling the market share for the semiconductor industry.
Seeing the dynamics adopted by governments around the world, Europe wants to move at a frenetic pace and invest billions in semiconductors and become a global player. The pandemic and the war in Ukraine have been the trigger for the Twenty-seven to come together to reduce their technological dependence on Asia and have independence in the manufacture of chips.
The new European Law on Chips will allow increase production from 10% to 20% by 2030, streamlining the authorization processes for the construction of factories, which will receive public funding to guarantee security of supply. The financing It would include facilities for the production of semiconductor manufacturing machines and centers of excellence for chip design.
The level of negotiations
Negotiations between European politicians were carried out at a fast pace, as in just 14 months developed the new regulatory text. Although the idea of taking 400 million euros earmarked for research for the semiconductor sector was initially rejected, it was agreed extract money from other parts of the EU budgetsuch as the digital program and unspent funds.
The EU Commissioner for the Internal Market, Thierry Bretonhas ensured that this agreement generates a geopolitical context of risk reduction, because with this the European Union would become an industrial power for the markets of the future and stop depending on external suppliers. it is vital that governments intervene more and more in the supply chainthus avoiding emergencies.
The new Chip Law create a mechanism to respond to crises and anticipate possible supply problems or shortages such as those suffered as a result of the severe economic recession that is plaguing the entire world and the current geopolitical tensions. Neverthelessthe rate of investment remains low due to reduced demand for chips and rising energy prices in Europe.
eva maydell, the main negotiator of the aid package in the European Parliament, assures that the Chip Law cannot be the only regulation that promotes the negotiations. And it is that Europe must fight to continue demonstrating that it is an attractive terrain for investors.
Injection to companies in Europe
It has recently been revealed that the Netherlands is joining the Biden administration in limiting China’s access to manufacturing equipment ASML Holding NV, based in Veldhoven (The Netherlands). ASML is one of the most powerful technology companies in the world capable of producing advanced chips, especially for the automotive industry.
Now EU member countries will be able to subsidize new chip teams and design facilities, so ASML will be able to continue to grow by receiving state funding, while documenting its policies on intellectual property protection.
In this line, GlobalFoundries, Intel, S.T.Microelectronics N.V. and Infineon Technologies AG have announced that they will undertake new projects following the proposal of the European Commission.
An economic boost for Spain
The country will benefit indirectly, because although the text of the European Chip Law must be approved by the Twenty-seven together with the European Parliament, if it is consolidated the factories would be distributed throughout the old continent. In this sense, Spain has 12,000 million euros of financing from the PERTE Chipwhich makes it the larger strategic project Economically speaking.
Similarly, the European Commission will include 3,300 million euros of financing for the sector Through the horizon europe program. This project seeks to encourage the creation and development of new startups in the sector, reinforcing innovation and investment capacities on the continent and creating a more favorable framework for new investors.
