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Industrial Policy

EU launches Chips Act industrial plan

The European Commission Tuesday launched a multiyear, large-scale investment plan for its microchips sector and presented new powers to secure chips in times of crisis, in an effort to “make Europe a leader in this market,” its President Ursula von der Leyen said.

“Chips are crucial in almost every device. But the pandemic has also painfully exposed the vulnerability of chips supply chains,” von der Leyen said, referring to shortages that have cropped up in the past year and a half and have ground manufacturing to a halt — including in Europe’s powerful automotive sector.

As part of the strategy, which includes a regulatory European Chips Act proposal, the Commission wants to launch a large-scale “Chips for Europe” investment plan, combining “almost €5 billion” in EU investment with private investments and member countries’ contributions for the purposes of research and innovation funding.

The Commission also recommended that its member countries set up a “toolbox” to secure chips supplies in case of an emergency. Such measures include organizing joint purchases using Europe’s market power, and compelling industry players to provide the EU with information on stock piles and pipelines.

The EU previously set itself the target of gaining 20 percent of the global market share in the semiconductor industry by 2030.

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