EU’s Chips Act Receives Final Approval
In recent years, governing bodies worldwide have implemented measures to enhance local chip manufacturing, including tax incentives and funding. The European Union has recently approved the Chips Act, a set of regulations aimed at improving semiconductor production capacity in its member states. The Chips Act, which was announced in February 2022, plans to utilize €43 billion ($47.5 billion) in investments to increase the EU’s share of microchip production to 20 percent by 2030, up from the current 10 percent. The Council of the European Union also hopes that this initiative will attract investment, promote research and innovation, and prepare Europe for any potential chip supply crisis. The semiconductor industry is expected to reach a value of $1 trillion by 2030, driven by the demand for smartphones, servers, data centers, and storage applications.
By adopting the chip law, the EU may remove some of its dependence on foreign players such as China for semiconductor manufacturing. “With the chip law, Europe will become a pioneer in the semiconductor race,” Spain’s Minister of Industry, Trade and Tourism Héctor Gómez Hernández said of the development. “We already see it in action: new production facilities, new investments, new research projects. And in the long term, this will also contribute to the renaissance of our industry and the reduction of our foreign dependence.”
The EU finally approved the Chips Act after President Biden signed the CHIPS and Science Act into law in 2022. It provided $52 billion in funding and tax credits to the U.S. semiconductor industry, with $39 billion earmarked for the semiconductor industry — funding applications first opened in spring 2023.
