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What is the Chips Act, the new European law on chips electronics?

© GregMontani/Pixabay

Computers, smartphones, game consoles, planes, cars, televisions… electronic chips are now present in most of the objects we use every day. The shortage of semiconductors, following the covid pandemic, illustrated the European Union's dependence on Asian manufacturers. The leaders of the old continent therefore developed their response by proposing the Chips Act which came into force on September 21.

This legislation sets a simple objective on paper: that the European Union weighs 20 ;% (this level is currently 10%) of market share in the electronic chip sector by 2030. To achieve this, financing of 43 billion euros is mobilized. It contains public and private funds.

How does Europe want to escape dependence?

The adopted text is based on three main pillars. The first aims to “facilitate the transfer of knowledge from the laboratory to the factory”. Clearly, 3.3 billion euros are being deployed to ensure that research progress concretely benefits industrial activities in this area.

The second pillar attempts to encourage public and private investment in the installation of semiconductor factories. From then on, States will be able to motivate investors to launch major projects in Europe. Germany, for example, has already convinced TSMC and Intel to produce locally by generously using its checkbook.

Finally, the last pillar of the Chips Act will make it possible to create a coordination mechanism between the European Commission and EU Member States. The idea is to be able to exchange and monitor supply and demand to best anticipate the potential risks of semiconductor shortages.

Quoted by Silicon Republic, Věra Jourová, Vice-President of the European Commission for Values ​​and Transparency, added that the EU has “a lot of talent and research”, but she believes that ;it does “ not link these advantages for production”.

The manager adds: “ The global race for leadership in the field of electronic chips is a fact and Europe must take an active part in it. The Chips Act will support investment and research facilities so that Europe can become an innovation powerhouse with a strong stake in the global market.”

Meanwhile, the United States also passed a Chips Act earlier this year. The latter is broadly based on the same methods with massive investments to boost local semiconductor production. You can also find our article on this subject here.

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Teilor Stone

By Teilor Stone

Teilor Stone has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining Thesaxon , Teilor Stone worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my teilor@nizhtimes.com 1-800-268-7116