EU Competes With The US And Asia With Its Chip Subsidy Scheme

A 43 billion euro ($47 billion) plan for the European Union’s semiconductor industry was approved on Tuesday in an effort to catch up to the United States and Asia and launch a “green” industrial revolution.

The EU Chips Act, which was put forth by the European Commission last year and approved by Internal Market Commissioner Thierry Breton, is modeled after the U.S. CHIPS for America Act and seeks to boost the bloc’s share of worldwide chip production to 20% by 2030.

On April 5, Reuters reported that a settlement was likely and that industry participants applauded the approval of the EU Chips Act, saying it would increase manufacturing capacity, skills, and R&D.

“We need chips to power digital and green transitions or healthcare systems,” Commission Vice-President Margrethe Vestager said in a tweet.

According to an EU official, more than 100 billion euros have already been invested in the EU since the unveiling of its plan for chip subsidies last year.

However, analysts like Paul Triolo, a China and technology expert at the Washington-based Center for Strategic & International Studies, warned that the EU may find it difficult to catch up to competitors.

“The critical piece of the equation which the EU will need to get right, as for the U.S., is how much of the supply chains supporting the industry can be moved to the EU and at what cost,” said Triolo.

While the EU governments and parliament have expanded the scope to embrace the entire value chain, including older chips and research and design facilities, the Commission had first proposed subsidizing solely cutting-edge chip manufacturers.

Hendrik Bourgeois, vice president of European government affairs at American chipmaker Intel, which would receive subsidies for a facility it operates in Germany, applauded the agreement and said it demonstrated the EU’s “serious commitment to securing its future prosperity.”

(Adapted from

Categories: Economy & Finance, Geopolitics, Strategy, Sustainability

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