The European Chip Act has been approved by the European Parliament!

On July 12th, it was reported that on July 11th local time, the European Parliament overwhelmingly approved the European Chips Act with a vote of 587-10, which means that the European chip subsidy plan of up to 6.2 billion euros (approximately 49.166 billion yuan) is one step closer to its official landing.

On April 18th, an agreement was reached between the European Parliament and EU member states to determine the content of the European Chip Act, including specific budget content. The content was officially approved by the European Parliament on July 11th. Next, the bill still needs approval from the European Council before it can take effect.
The bill aims to promote the production of microchips in Europe to reduce dependence on other markets. The European Parliament announced that the European Chip Act aims to increase the EU’s share of the global chip market from less than 10% to 20%. The European Parliament believes that the COVID-19 epidemic has exposed the vulnerability of the global supply chain. The shortage of semiconductors has led to the rise of industry costs and consumer prices, slowing the recovery of Europe.
Semiconductors are an important component of future industry, widely used in fields such as smartphones, automobiles, heat pumps, household and medical devices. Currently, the majority of high-end semiconductors worldwide come from the United States, South Korea, and Taiwan, with Europe lagging behind its competitors in this regard. EU Industry Commissioner Thierry Breton stated that Europe’s goal is to gain a 20% share of the global semiconductor market by 2027, compared to only 9% currently. He also stated that Europe needs to manufacture the most advanced semiconductors, “because this will determine tomorrow’s geopolitical and industrial strength.
In order to achieve this goal, the EU will simplify the approval process for the construction of chip factories, facilitate national assistance, and establish an emergency mechanism and early warning system to prevent supply shortages as during the COVID-19 epidemic. In addition, the EU will also encourage more manufacturers to produce semiconductors in Europe, including foreign companies such as Intel, Wolfsburg, Infineon, and TSMC.
The European Parliament passed this bill with an overwhelming majority, but there were also some criticisms. For example, Henrik Hahn, a member of the Green Party, believes that the EU budget provides too little funds for the Semiconductor industry, and more self owned resources are needed to support European enterprises. Timo Walken, a member of the Social Democratic Party, said that in addition to increasing the production of semiconductors in Europe, it is also necessary to promote product development and innovation.