The Council of the European Union approved a regulation to strengthen Europe’s presence in the world of semiconductors, better known as “Chips Act”. The legislation aims to create better conditions for European countries to get into semiconductor manufacturing, attract investments, promote research and innovation and prepare the continent for any future supply chain crisis.
Why does the EU need the Chips Act?
Once the program kicks in, it will see €43 total investments, €3.3B of which will be donated directly from the EU budget, and the aim is the global market share to double from the current 10% to at least 20% by 2030.
The EU posted a neat infographic that explained the need for chips – from everyday appliances through critical applications in cars, planes, and healthcare to key infrastructure like energy, mobility, and data communication. The global production of microchips reached 1.1 trillion units in 2021, which is around 140 chips per person.
Why does the EU need the Chips Act?
Europe produced 10% of that in 2020, of which 27% were for the automotive industry, 22% for aerospace/defence/security and 20% for other industries. Smartphones were not even in the Top 5. The market is expected to reach $1 trillion by 2030, and the forecast is for all key application sectors rapidly increase. For example, the global smartphone chip market was $116 billion in 2020 and is expected to reach $210 billion in 2030.
