EU agrees plan to boost chip production
The European Parliament and EU member states reached an agreement Tuesday on a plan to boost the supply of semiconductors in Europe, as the bloc races to reduce its dependence on Asian suppliers. The European Union has prioritised local chip production after the coronavirus pandemic triggered supply chain shocks that led to significant shortages. EU chief Ursula von der Leyen said the deal "will allow for a competitive chips industry and build the foundation for a global market share. It will power a clean tech industry made in Europe and strengthen our digital resilience and sovereignty." Under the provisional political agreement, the EU aims to double its current global market share to 20 percent in 2030 and mobilise more than 43 billion euros in public and private investments to feed Europe's growing appetite for chips. Europe will need to quadruple its production to meet this target. Funding will come from existing EU budget money and the deal will also loosen state aid rules to spend money on developing centres to produce the key component. The EU will also mobilise 3.3 billion euros for research and development, and the deal includes a system to monitor supply shortages to act in times of crisis. The legislative text also forms part of the bloc's bid to produce more in Europe to reduce its vulnerability to geopolitical shocks like the war in Ukraine. "This will allow us to rebalance and secure our supply chains, reducing our collective dependence on Asia," Thierry Breton, the EU's industry commissioner, said in a statement after the parliament and the European Council reached an agreement. (AFP)