EU approves $47.5B Chips Act in response to US semiconductor subsidies.
The European Union Approves Major Subsidies for Semiconductor Chip Production
The European Union has taken a significant step in the race to build up domestic technology industries by approving major subsidies for semiconductor chip production capabilities. The Chips Act, which received final approval from the European Council, will provide 43 billion euros ($47.5 billion) in private and public investments to expand chip factories in Europe.
The goal of the new program is to double the EU’s global share of chip production from 10% to 20% by 2030. This move comes a year after the United States passed its own CHIPS Act, aiming to enhance its chip production capabilities.
Europe’s Leap Forward in Semiconductors
“With the Chips Act, Europe will be a frontrunner in the world semiconductors race,” said Hector Gomez Hernandez, Spain’s minister for industry, trade, and tourism. ”We can already see it in action: new production plants, new investments, new research projects. And in the long run, this will also contribute to the renaissance of our industry and the reduction of our foreign dependencies.”
The Chips Act is now considered adopted and will be signed by the presidents of the European Parliament and the European Council. It will then be published in the Official Journal of the European Union.
The CHIPS Act, enacted in the United States last year, provides $52 billion in subsidies to encourage the development of domestic chipmakers and suppliers. President Joe Biden has hailed this law as crucial to reviving domestic manufacturing. However, the White House has faced challenges, including delays in the launch of a new semiconductor factory in Arizona due to a worker shortage.
The CHIPS Act was primarily passed to reduce the U.S.’s reliance on China and Taiwan for key technologies. It is part of an escalating tech war between the two countries, with China restricting the export of certain metals necessary for semiconductor production, leading to increased costs.
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