The European Union's effort to reduce its reliance on U.S. and Asian semiconductors by investing €43 billion ($47 billion) in its semiconductor industry is expected to receive approval from EU countries and lawmakers on April 18th, according to sources familiar with the matter. The Chips Act, which was introduced by the European Commission last year in response to global supply chain issues that adversely impacted European businesses, seeks to double the bloc's global chip output to 20% over the next ten years. The legislation was proposed after the United States announced its CHIPS for America Act, aimed at competing with Chinese technology.
EU countries and lawmakers will convene in Strasbourg on April 18th to negotiate funding details for the Chips Act, with a deal expected to be reached, said the sources. Discussions have thus far centered on a €400 million ($438 million) funding gap, but the EU executive has managed to secure most of the necessary funds, they added. Although the Commission had initially proposed funding only cutting-edge chip plants, EU governments and lawmakers have broadened the scope to cover the entire value chain, including research and design facilities, and older chips.
Sources noted that lawmakers have singled out Belgium-based IMEC, a world-leading innovation hub in nanoelectronics and digital technologies, as a crucial reason for investing more funds into EU R&D. Additionally, funding the entire value chain aims to address complaints from smaller EU countries about being excluded after Intel chose Germany as the location for its new mega chip manufacturing complex, attracted by the Chips Act. Meanwhile, STMicroelectronics, a Franco-Italian firm, has partnered with GlobalFoundries to build a €6.7 billion chip factory in France, using government funding.