December 7, 2021
EU opens door to giving aid for semiconductor production

EU opens door to giving aid for semiconductor production

BRUSSELS — The European Fee stated Thursday that it may approve aid to fund production of semiconductors within the 27-nation bloc amid a world chip scarcity and intense worldwide competitors to fill the necessity.

The EU’s government arm expects that the shortage of semiconductors — a key part in the whole lot from smartphones to vehicles — will final, affecting the area’s financial system.

Automakers have been among the many hardest hit by the scarcity, which has slowed or halted production.

Most of chipmakers are based mostly in Asia, and the bloc desires to scale back its dependence by boosting production on its soil.

“The fee will take into account approving assist to fill attainable funding gaps within the semiconductor ecosystem, particularly for European first-of-a-kind amenities,” stated Margrethe Vestager, the European commissioner for competitors.

She stated safeguards shall be put in place to make certain the aid is “necessary, appropriate, proportionate and of course to make sure that undue competition distortion is limited.”

Vestager’s announcement adopted the presentation in September of the European Chips Act, which goals to make the bloc aggressive within the race for probably the most superior chips by increasing analysis and production within the EU. Earlier this yr, the bloc additionally launched an industrial alliance with the objective of accelerating the EU’s share of the worldwide production of semiconductors to 20% by 2030.

Within the international race, the U.S. has been stepping up efforts to bolster the business. U.S. lawmakers accepted a invoice earlier this yr with the objective of boosting home semiconductor production, a part of a wider rivalry with China over commerce and expertise.

As she laid out a overview of the European Union’s competitors coverage, Vestager stated “self-sufficiency is an phantasm” however insisted that the EU cannot depend on one nation or firm alone for chips.

“The goal must be a diversification amongst like-minded companions to construct a resilient provide chain and to keep away from single factors of failure,” she stated.

In the meantime, the fee prolonged the State Aid Short-term Framework to assist firms hit by the coronavirus pandemic till the top of June, Vestager stated. Underneath that program, greater than 3.1 trillion euros ($3.5 trillion) of aid throughout the bloc has been accepted.

“On the one hand, the restricted prolongation provides the chance for a progressive and coordinated phase-out of disaster measures, with out creating cliff-edge results,” she said. “This reflects the projected strong recovery of the European economy overall. On the other hand, we will continue to closely monitor the worrying rise in COVID-19 infections and other risks to the economic recovery.”

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