EU reveals billion-euro plan to help it tackle global chip shortage

European Union
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The European Union (EU) has outlined a series of measures designed to improve the continent’s ability to design, manufacturer, and supply chips to businesses, such as those in the mobile and auto industries, rely on access to advanced semiconductor technologies.

A global chip shortage caused by the Coronavirus pandemic, combined with the rise of technology as a key strategic consideration, has led many countries and regions to reassess their supply chains and production capabilities.

The EU says the shortage has exposed weaknesses in the current situation both in terms of geopolitics and diversity of suppliers, lamenting the fact that businesses are reliant on a small number of vendors from a few countries.

EU Chips Act

“Chips are necessary for the green and digital transition - and for the competitiveness of European industry. We should not rely on one country or one company to ensure safety of supply,” said  Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age. 

“We must do more together - in research, innovation, design, production facilities - to ensure that Europe will be stronger as a key actor in the global value chain. It will also benefit our international partners. We will work with them to avoid future supply issues.”

The ‘European Chips Act’ is a €43 million package that will look to enhance Europe’s existing technological and research capabilities through funding and investments, while providing support for additional manufacturing and distribution resources.

The EU plans to pool its resources with those of member states and third countries it partners with, while also creating a common policy that addresses weaknesses and allows governments and businesses to respond quickly when there are challenges. The hope is that the EU will double its market share to 20% by 2030.

“The European Chips Act will be a game changer for the global competitiveness of Europe's single market,” declared European Commission (EC) president Ursula von der Leyen. “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. 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.”


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Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.