The European Chips Act was adopted February 8th by the European Commission. This Act originates from the facts that semiconductors are essential to the functioning of our modern economy and society; and that the current semiconductor shortage crisis threatens critical sectors including health, transport, energy, defence, security and space. Thus, the Act is a Commission Proposal for a Regulation of the European Parliament and the Council, that establishes a framework of measures for strengthening Europe's semiconductor ecosystem, titled Chips Act. A proposal for a Council Regulation complements this.
The Chips Act aims at reaching the strategic objective of increasing the resilience of Europe's semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. To fulfill this vision, the European Chips Strategy is articulated around five strategic objectives:
- Europe should strengthen its research and technology leadership;
- Europe should build and reinforce its own capacity to innovate in the design, manufacturing, and packaging of advanced chips, and turn them into commercial products;
- Europe should put in place an adequate framework to increase substantially its production capacity by 2030;
- Europe should address the acute skills shortage, attract new talent, and support the emergence of a skilled workforce;
- Europe should develop an in-depth understanding of global semiconductor supply chains.
In terms of delivering these objectives, one of the goals proposed by the Chips Act is to set up the Chips for Europe Initiative. This Initiative aims to support large-scale capacity building, through investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU's advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. The Initiative will build a virtual design platform to reinforce Europe's design capacity, which will be accessible on open, non-discriminatory, and transparent terms. The platform will simulate a wide cooperation of user communities with design houses, intellectual property and tool suppliers, designers and research and technology organisations.
The actions under the Chips for Europe Initiative will mainly be implemented through the Chips Joint Undertaking, which is an amended and renamed version of the current Key Digital Technologies Joint Undertaking. This structure would complement the Digital Europe Programme as well as the Horizon Europe.
Another structure in the proposal is the European Semiconductor Board, composed of representatives from Member States and chaired by the Commission. This Board will provide advice on the Initiative to public authorities and shall support the Commission in international cooperation. It shall also coordinate and exchange information with relevant crisis structures established under Union law.
At national level, Member States will designate one or more national competent authorities and among them, a national single point of contact for the purpose of implementing the Regulation.
In view of the structural deficiencies of the semiconductor supply chain, it recommends measures to enable monitoring of the semiconductor value chain, focussing on risks that may disrupt, compromise or negatively affect the supply of semiconductors. Those measures should prepare and enable the permanent mechanism for monitoring of the semiconductor supply chain proposed under the Regulation.
Commission Recommendation on a common Union Toolbox to address semiconductor shortages and EU mechanism for monitoring the semiconductor ecosystem
The Commission has also recommended to set up the European Semiconductor Expert Group, for the purpose of implementing this Recommendation. This Group will aim to serve as a platform for coordination between Member States and provide advice and assistance to the Commission in the implementation of the forthcoming Regulation. It should also facilitate rapid and effective information exchange between the Member States and the Commission on market developments. The tasks of the European Semiconductor Expert Group shall be taken over by the European Semiconductor Board to be established in the Regulation.
As a first measure, Member States are recommended to request information from representative organisations of undertakings, or semiconductor and equipment manufacturers. This would allow the expert group to identify and tailor potential crisis response measures. The data should concern production capability and capacity and primary disruptions and bottlenecks.
Similarly, Member States are also encourages to asses whether the Union should exercise surveillance over certain exports for securing supply in the internal market. If protective measures are deemed appropriate, necessary and proportionate.
The Proposal is not accompanied by a formal impact assessment. Considering the urgency of the matter, an impact assessment could not have been delivered.
With regards to budget, the EU Budget will support the Chips for Europe Initiative, with a total of up to 3.3 Billion Euro. 1.65 Billion Euro will be canalized through the Horizon Europe programme and another 1.65 billion via Digital Europe Programme. 2.875 billion will be implemented through the Chips Joint Undertaking.