Strategy EU CHIPS ACT

The EU Chips Act aims to achieve international interdependency

Strategy EU CHIPS ACT

Since 2021, the European Union (EU) put in place an official Act to coordinate the creation of a state-of-the-art European chip ecosystem, from production to end-users.

The idea, as stated by the President of the European Commission when setting out the EU’s chips strategy, is to “link together our world-class research, design and testing capacities (…) to coordinate EU and national investment along the value chain. (…) This is a matter of tech sovereignty.”.

Indeed, as illustrated by the recent events and crisis, the EU current semiconductors ecosystem faces many challenges and strong limitations:

Fragmented efforts across technological competences, value-chain segments and member states

Lack of instruments that provide a path for sustainable research from the lab to industrialisation
EU has leading research organisations but their outcomes are often taken up in other parts of the world
Costly and risky processes for early stages of chip development
Lack of a design ecosystem that brings together multiple tools and competences broadly distributed in Europe and provides an efficient access to IC users.

Chips Act Infographic

Chips Act Package

The goals of the EU Chips Act

Therefore, as the European industry and main tech-players are still too dependent on foreign countries, the EU Chips Act aims to achieve international interdependency, with balanced partnership on initiatives of mutual interest, as necessary step forward for the European industry and the field of Semiconductor to ensure:

A reliable global marketplace for European products
Security of supply, including in crisis situations.

To achieve the need for balanced semiconductor partnerships with like-minded countries, the objectives of the EU Chips Act are the following:

To strengthen its research and technology leadership
To build and reinforce its own capacity to innovate in the design, manufacturing and packaging of advanced chips

To put in place an adequate framework to increase substantially its production capacity by 2030
To address the acute skills shortage
To develop an in-depth understanding of the global semiconductor supply chains.

These objectives are crucial to increase the European position in the field of Semiconductor and Semiconductor-based photonics, and more generally for the success of the EU Chips Act.

They will be completed through closely followed international cooperation:

Exchange information for the monitoring of the semiconductors supply chain and on early-warning mechanisms to prevent supply disruptions
Promote joint R&D on semiconductor technologies combining complementary competencies
Explore synergies for international standardisation of trusted chips and chip security.

All of the above shall be made possible through 3 main lines of actions, referred to as “pillars”.

“The idea is to link together our world-class research, design and testing capacities (…) to coordinate EU and national investment along the value chain. (…) This is a matter of tech sovereignty.”

This pillar joins all the actions in line with the creation of a large innovation capacity and a resilient and dynamic semiconductor ecosystem.

PILLAR 1 – Chips for Europe initiative

This pillar joins all the actions in line with the creation of a large innovation capacity and a resilient and dynamic semiconductor ecosystem.

Build up large-scale design capacities for integrated semiconductors technologies

Enhance existing and develop new pilot lines
Build advanced technology and engineering capacities for accelerating the development of quantum chips
Create a network of competence centres across Europe
Establish a Chips Fund to facilitate access to loans and equity by start-ups, scale-ups and SMEs and other companies in the semiconductor value chains.

PILLAR 2 – Definition of first-of-a-kind facilities

As mentioned in the article 2 of the EU Chips Act, the focus will be on defining and setting up an “industrial facility capable of semiconductor manufacturing (…) that is not substantively already present or committed to be built within the Union (…) with regard to (…) product innovation that can offer better performance, process innovation or energy and environmental performance”, through two main actions:

Integrated Production Facility (IPF)
- Vertically integrated first-of-a-kind facility
Open EU Foundry (OEF)
- First-of-a-kind facility that offers production capacity to unrelated undertakings

Both which should follow the below criteria:

Qualifications as first-of-a-kind facility
Clear positive impact on the value chain (security of supply and qualified workforce)
Security of supply: guarantee not to be subject to extraterritorial application of public service obligations of third countries in a way that undermines the ability to accept priority rated orders
Clear commitment to invest in the next generation of chips

The goal is to come out with product innovation that can offer better performance, process innovation or energy and environmental performance

A toolbox of emergency measures

PILLAR 3 – Coordination mechanism

The third and last pillar is itself based on 3 pillars, and, more precisely, a toolbox of emergency measures, that could be used to ensure security of supply in the crisis stage (see below).

Emergency Toolbox:

Project details:

TITLE: International Cooperation On Semiconductors START-END: January 2023 – December2025
EU CONTRIBUTION: 2, 99M€
TOPIC: HORIZON-CL4-2022-DIGITAL-EMERGING-01

Contact:

Coordinator: Francis Balestra

Contact form

ICOS has received funding (2023 – 2025) from the European Union’s Horizon Europe research and innovation programme under GA No 101092562.