The European Commission is taking action to position Europe as a leader in chips by boosting production, increasing supply chain resilience and more.
Microelectronics, also known as chips, are the digital heart of every appliance you use: your phone, your fridge, your car...
There is no digital without chips. Did you know that a modern car can have well over 1,000 chips to make it work? Chips have become part of the global technology race.
So we must make sure that we have enough supply of chips in Europe, doubling our global market share to 20% in 2030. This is what the European Chips Act is about.
Semiconductor chips are the essential building blocks of the digital products we use constantly, ranging from smartphones and computers, to appliances in our homes, lifesaving medical equipment, communication, energy, industrial automation and more. Chips are everywhere.
A mobile phone contains about 160 different chips.
A hybrid electric car contains up to 3,500 chips
World shortage since 2020
Higher prices
Lengthier delivery for consumer electronics and life-saving equipment
Car production decreased by 1/3 in some EU countries
Europe is strong in some specific areas
Semiconductor research: World leading techniques behind the most advanced chips
Chip manufacturing: essential equipment for all advanced chips
Silicon wafers: mirror-like material essential for manufacturing semiconductors
Chips for automotive and for industrial equipment: EU companies global leaders on the market
However, the EU has only roughly 10% of global market share and is heavily dependent on third-country suppliers – nearly 80% are headquartered outside the EU.
The Chips Act aims to contribute to increasing Europe’s global market share of cutting-edge semiconductors to 20%.
The EU aims to play a leading role in the design and manufacturing of the next generation of microchips, down to 2 nanometers nodes and below.
To put this in context, a nanometre is one billionth of a metre. It is how much a fingernail grows per second. 2 nanometres, the size of chips the EU aims for, is about the thickness of a strand of human DNA. And a human hair is 80,000-100,000 nanometres wide.
Current state of the art in chips: engraving at 3 nanometres.
2022: The first semiconductors at 3 nanometres go into production in Taiwan
2 nanometres and below are expected in 2024.
The European Chips Act
The Chips Act entered into force on 21 September 2023.
It aims to ensure that the EU strengthens its semiconductors ecosystem, increases its resilience, as well as guarantees supply and reduces external dependencies.
To achieve these aims the Chips Act consists of three pillars:
Chips for Europe initiative
- Enhancing and developing design tools and pilot lines for the prototyping, testing and experimentation of cutting-edge chips – including quantum chips
- Support for innovative start-ups, scale-ups and SMEs in accessing equity finance through the Chips Fund
- Fostering skills, talent and innovation in microelectronics
Security of supply and resilience
- A more investor-friendly framework for establishing manufacturing facilities in Europe by granting the status of integrated production facility (IPF) and open EU foundry (OEF)
Monitoring and crisis response
- Development of tools and methods for anticipating and responding to semiconductor shortages and crises to ensure security of supply such as:
- Supply Chain Alert Notification (SCAN)
- Crisis stage and emergency toolbox
- The European Semiconductor Board (ESB) provides the Commission with advice, assistance, and recommendations across the three pillars of action:
- It is responsible for monitoring and crisis response activities
- It advises on the Initiative to the Public Authorities Board of the Chips Joint Undertaking;
- It is consulted for the decisions of the Commission to grant the status of IPF and OEF;
Investment
The Chips Act should result in public investments of more than €43 billion.
These investments will complement:
- existing programmes and actions in research & innovation in semiconductors (Horizon Europe, Digital Europe programme)
- announced support by Member States.
In total, more than €100 billion of policy-driven investment will support the Chips Act until 2030, including public and private investments.
Achievements
30 November 2023
Chips JU inaugurated
Launch of calls for 4 pilot lines with EU funding of €1.67 billion
European Semiconductor Board held its first meeting
07 February 2024
Launch of €216 million EU funding in calls for proposals to support semiconductor research and innovation initiatives
11 April 2024
Selection 4 Pilot lines with combined funding of €3.3 billion from EU and Member States
31 May 2024
Approval of €2 billion Italian State aid measure to support STMicroelectronics in setting up a new semiconductor manufacturing facility
4 July 2024
Launch of €145 million EU funding in calls for proposals to set up a design platform and competence centres
Related Content
European Chips Act
The European Chips Act will boost Europe’s technological sovereignty, competitiveness, resilience...