The Commission is today proposing a comprehensive set of measures for security of supply, resilience and EU technological leadership in semiconductor technologies and applications.

The European Chip Act will increase Europe’s competitiveness and resilience and help achieve the digital and green transitions.

Recent world shortages of semiconductors have forced many factories in various sectors, from car manufacturing to medical devices, to shut down. In the automotive sector, for example, production in some Member States decreased by a third in 2021. This has shown even more clearly the dependence of semiconductor value chains worldwide on a small number of actors in complex geopolitical circumstances. However, it also pointed to the importance of semiconductors for the whole of European industry and society.

The EU chip act will be based on what makes Europe stand out — the world’s leading research and technology organisations and networks, as well as a range of pioneering equipment manufacturers — and will reduce the remaining gaps. It will establish a successful semiconductor sector, from research to production and a resilient supply chain. It will mobilise over EUR 43 billion in public and private investment and identify prevention, preparation, anticipation and rapid response measures in case of future disruptions in supply chains, together with Member States and our international partners. It will enable the Union to reach the target of doubling the current market share, to 20 %, by 2030.

The European Chip Act will enable the Union to equip itself with the tools, skills and capacities needed to take the lead in the sector, not only in research and technology in the design, manufacture and packaging of advanced chips, in order to achieve a secure supply of semiconductors and reduce dependencies. Its main elements are:

• the Laces for Europe initiative, which will pool funds from the Union, the Member States and third countries associated with existing Union programmes, as well as private sector funds under the enhanced Chips Joint Undertaking, to be established as a result of the strategic re-orientation of the existing Key Digital Technologies Joint Undertaking. EUR 11 billion will be available to improve current research, development and innovation, deploy advanced semiconductor tools and pilot lines for prototyping, testing and experimentation for new devices for innovative practical applications, as well as staff training and in-depth information on semiconductor ecosystem and value chain
• a new framework for achieving security of supply by attracting investment and increasing production capacity; it is necessary to facilitate innovation for advanced nodes and innovative and energy-efficient chips. In addition, the Chips Fund will facilitate access to finance for start-ups to help them develop innovation and attract investors. It will also include a dedicated instrument for semiconductor equity investments under InvestEU to help scale-up companies and SMEs to scale up
• coordination mechanism between Member States and the Commission for monitoring semiconductor supplies, assessing demand and forecasting shortages. It will monitor the semiconductor value chain by collecting relevant data from companies to identify the main gaps and bottlenecks. It will allow the preparation of joint crisis assessments and the coordination of the necessary measures of the new contingency package. It will also allow for swift and determined joint action using all the possibilities of national and Union instruments.

The Commission is also proposing an accompanying recommendation to Member States. It is an instrument with immediate effect that allows the coordination mechanism between Member States and the Commission to function immediately. It will allow for immediate debate and decision-making on timely and proportionate crisis response measures.