×

We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now
European Commission president Ursula von der Leyen. Picture: OLIVIER MATTHYS/REUTERS
European Commission president Ursula von der Leyen. Picture: OLIVIER MATTHYS/REUTERS

Brussels — The European Commission will ease funding rules for innovative semiconductor plants under plans announced on Tuesday as the EU looks to boost its chip industry and cut its dependence on US and Asian supply.

The European Chips Act will “enable €15bn in additional public and private investment by 2030”, commission president Ursula von der Leyen said in a statement.

“This will come on top of €30bn of public investments already planned from NextGenerationEU, Horizon Europe and national budgets. And these funds are set to be matched by further long-term private investments,” she said, referring to existing EU projects.

The move mirrors the $52bn US Chips Act aimed at increasing competitiveness with China.

It comes as a global chip shortage and supply chain bottlenecks create havoc for carmakers, health-care providers, telecom operators and others.

Von der Leyen said the bloc will ease its state aid rules, which aim to prevent illegal and unfair subsidies granted by EU countries to companies, for innovative chip factories.

“We are, therefore, adapting our state aid rules, under strict conditions. This will allow — for the first time — public support for European ‘first-of-a-kind’ production facilities, which benefit all of Europe.”

Such factories may be allowed to get more state funding, EU digital chief Margrethe Vestager said as the bloc seeks to double its global market share to 20% in 2030.

“Such facilities, they would not exist in Europe if we do not do something. It may be justified to cover up to 100% of the proven funding gap with public resources,” she told a news conference.

Smaller EU countries have voiced their unease over the looser rules, fearing a subsidy race that will favour companies in the bigger countries, an EU diplomat said.

The chip push comes as EU countries woo US chipmaker Intel, which has yet to announce where it will locate a European mega-fab plant, triggering concerns of a subsidy race. Intel welcomed the EU chip push, urging authorities on both sides of the Atlantic to join forces.

“We are now considering a significant increase in our European footprint, and we expect that the EU Chips Act will facilitate these plans,” the company said in a statement.

Britain’s Arm, which named a new CEO on Tuesday, said it will go public before March 2023 and Masayoshi Son, boss of parent firm SoftBank, indicated that would be in the US, most likely the Nasdaq.

The initial public offering plans come as SoftBank dropped plans to sell Arm to US chipmaker Nvidia, setting aside a deal potentially worth up to $80bn due to regulatory hurdles.

GlobalWafers is also looking for a new greenfield site as part of a $3.6bn expansion plan put in place after its failed takeover of Germany’s Siltronic.

The European Chips Act also includes a toolbox allowing the European Commission to demand that companies deliver key chips during a crisis.

It will require approval from EU countries and EU legislators before it can become law

Reuters

subscribe

Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.