The purpose of approving the new CHIPS act is to magnetize more investments and boost R&D in the EU nations
After several months of discussions, the European Union has finally approved the much-awaited $47.5 billion incentive plan to boost more fabs and escalate semiconductor manufacturing in the EU nation. The incentive plan is expected to augment the semiconductor industry’s market to 20 percent from the current 10 percent by the end of 2030.
In an interaction with the media, Héctor Gómez Hernández, Spanish minister for industry, trade, and tourism said, “In the long run, this will also contribute to the renaissance of our industry and the reduction of our foreign dependencies." The purpose of approving the new CHIPS act is to magnetize more investments and boost R&D in the EU nations so that in the coming years, when there will be again shortage of chipsets there are no challenges and also lesser dependence on imports.
The approval has been given after more than a year the EU shortlisted innovative plans to turn into a leader in fabricating and developing computer chips. The US based global semiconductor firm Intel has already started building a new production unit in the region. According to the experts, the EU was forced to approve the policy after the rival USA escalated in-house investments and it has already unleashed a $52 billion investment scheme “CHIPS and Science Act”. Around $39 billion incentives are being provided by the Biden administration to the global chip companies to build manufacturing units in the country.
The council of the European Union has approved the new Chips Act and now, it is in the process of getting signed by the President of the European Parliament and the President of the council. Finally, it will be published in the office journal of the EU before becoming effective. Experts also added that the EU region is now overly dependent on the other countries for chips, which has increased more during the COVID pandemic.
Various industrial sectors such as health, defense and energy faced supply chain imbalances and semiconductor shortages. According to the council's official statement, "The Chips Act aims to reduce the EU’s vulnerabilities and dependencies on foreign actors while reinforcing the EU’s industrial base for chips, maximizing future business opportunities and creating good-quality jobs. This will improve the EU’s security of supply, resilience, and technological sovereignty in the field of chips."