3. Data, Cloud & Edge

EU Chips Act

According to the mission presented by the European Commission, the European semiconductor production should represent at least 20 percent of global production by 2030. The current European semiconductor strategy is based on two initiatives towards this target. The Alliance on Processors and Semiconductor Technologies is an umbrella organisation in which political decision-makers, research organisations and industry leaders work together to develop a roadmap for the European semiconductor ecosystem. The European Chips Act published by the European Commission on 8 February 2022 is designed to create a modern European chip ecosystem including production. With a volume of 43 billion euros, the EU Chips Act has the potential to strengthen Europe as a global actor in the production of chips and fuel the ecological and digital transformation of Europe as a business location. The EU Chips Act covers three dimensions: (i) strengthening semiconductor research and development (with eleven billion euros in Chips for Europe), (ii) promoting first-of-a-kind factories for semiconductors in Europe, (iii) monitoring and measures for a crisis mode such as export restrictions, obligations to provide information and order obligations.

Especially in view of the intensifying global competition, German industry regards the prospect of public sector support for the development of a European semiconductor ecosystem, particularly for European first-of-a-kind facilities, as a very positive step towards the aim of achieving supply chain resilience. We welcome the requested transparency along chip supply chains. At the same time, German industry is concerned about the crisis mode measures (allocation or monopolisation of the purchase of chips and the discretionary power of the EU in the definition of ‘crisis’) in terms of regulatory and competition law. The EU Chips Act should focus more on strengthening international alliances with likeminded partners based on mutual dependencies, also through trade agreements.

Many other countries alongside the European Union are now also striving to increase their semiconductor production capacities, above all the United States and China. Increasing semiconductor production capacities is very important given the rising demand across all industries. We therefore very much welcome the Important Project of Common European Interest Microelectronics and Communication Technologies (IPCEI ME/CT), for which proposals are currently being evaluated, as well as the proposal of the European Commission for an EU Chips Act to provide a strategic framework. The European Commission and EU Member states should nonetheless work towards global value chains instead of protectionism, and global cooperation instead of a global subsidy race. As companies are experiencing a severe shortage of semiconductors on a global level, policy and initiatives on semiconductors of the different regions and countries across the world should be coordinated to ensure that the global supply of semiconductors can meet the global demand in future.

The semiconductor ecosystem spans the globe. Initiatives such as the Transatlantic Trade and Technology Council (TTC) should therefore be used to a greater extent to strengthen the core competencies of Europe and North America and bring about closer cooperation at the same time. Closer transatlantic cooperation is an important prerequisite to strengthen the competitiveness of the semiconductor industry in both regions. International standardisation roadmaps and technical standards should be advanced to improve collaboration. It is also important to ensure a level playing field in terms of market access and competition. Specifically, this entails a mutual dismantlement of barriers to investment, avoiding new trade restrictions and coordinating measures to control exports. A further relevant point is the development of joint strategies to secure the semiconductor supply chain and a common understanding of ‘leading edge’ semiconductors to ensure that public investment (grants and tax incentives) is channelled to meet the current and future needs of all industrial sectors. In this context, BDI’s Transatlantic Business Initiative (TBI) welcomes the European Commission’s