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EU plans €43 billion to tackle domestic chip shortage

This Plan comes under “European Chips Act”

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EU'S 43 billion plan to reduce

European Commission plans €43 billion in developing semiconductor industry domestically by 2030.

The plan will be covered under the European Chips act which will include an investment of almost €5 billion from the European Union. The rest amount will be coming from the member states and private investments. Those states/countries will have to approve the investments individually. So the investments from them may not be guaranteed until approved.

European Commission President Ursula von der Leyen said, “Chips are crucial in almost every device, but the pandemic has exposed the vulnerability of the chips supply chains. Adding to his words he said, “We have seen that whole production lines came to a standstill, for example with cars. While the demand was increasing, we could not deliver as needed because of the lack of chips. So this European Chips Act comes absolutely at the right time.”

The goal of this newly introduced act is to globally increase the European Union’s share of high-end chip production to 20 per cent from presently being 9 per cent only, as well as to improve the energy efficiency of chips, and additionally increase the proportions of the Semiconductor design that is based on European technology.

“Europe will always work to keep global markets open and to keep them connected. This is in the world’s interest including our personal interest, too. But what we need to tackle are the bottlenecks that slow down our growth, as we are just experiencing it right now.”

The United States is also on track to invest $52 billion which could outspend European Union in a shorter time frame. Last year, South Korea said that it will invest $451 billion in domestic semiconductor manufacture over the next decade, with Samsung Electronics and SK Hynix Inc. contributing private capital.

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