EU Chips Act: Plan for semiconductor manufacturing in the EU to be unveiled this week

Under the umbrella of the EU Chips Act, the EU plans to further promote semiconductor manufacturing within the member states. This week, the EU Commission will finally launch its plan for subsidies.

EU Chips Act nears completion

Last March, the EU Commission first unveiled a plan for chip manufacturing within EU member states. Around 20 percent of all semiconductors needed worldwide should thus finally be manufactured in Europe again after the EU Chips Act is completed.

Now a draft of the subsidy plan circulated, which revolves around the financing of the implementation as well as the rights on the part of the EU in subsidizing suppliers. The EU Chips Act is expected to be concluded as early as February 8, 2022.

In doing so, the Commission plans to retain corresponding rights in order to secure supplies from manufacturers. This is an aggressive plan, but it is already being used in this form in other countries.

The aim is to ensure that the billions in public funds also benefit domestic industries. Especially due to the ongoing COVID-19 pandemic, the money would be urgently needed to strengthen the domestic market.

Details of the subsidy amount are pending

It is currently unclear how much the funding and subsidies will ultimately amount to. Because with concrete numbers the draft holds itself up-to-date still covered. Only an investment of the amount of 10 billion euros in design and production capacities by 2027 is considered certain.

A large part of this sum is likely to go toward the construction and refurbishment of factories and production facilities. However, it is doubtful whether this budget will be sufficient. Intel’s campus in Ohio, for example, equipped with the latest technology, cost around 20 billion US dollars.

Often, 40-50 percent of this is subsidized by the state, or in this case by the EU Commission, which means that the budget is almost exhausted. Concrete details are to follow in the course of the week.