EU plans to quadruple chip production by 2030

The European Parliament on has formally approved an EU plan to boost its own supply of semiconductors, a strategic goal to reduce dependency on Asia.

The process of manufacturing of electronic chips in a semiconductors factory near Paris. © AFP - Thomas Samson

An overwhelming majority of lawmakers - 587 to 10 - backed the EU Chips Act, which is meant to see European Union chip production quadruple by 2030 to account for 20 percent of the global output.

Globalisation and the rise of Asian manufacturing has seen European activity in the sector decrease in recent decades.

The market is dominated by Taiwan, which makes 90 percent of the most advanced chips, South Korea and, increasingly, China.

The Covid pandemic in 2020 caused supply chains from Asia to seize up, dealing serious shortages to the European car industry in particular.

Semiconductors are also vital for many other everyday items, ranging from smartphones to household appliances. They are also needed for data storage, which is in full expansion, and in green tech to reduce carbon output.

To reach its ambitious goal in chip production, the EU will have to mobilise more than 43 billion euros in public and private investments.

The drive is part of a strategy of greater European self-sufficiency, backed by French President Emmanuel Macron, which has been galvanised by energy and food shocks caused by Russia's war in Ukraine.

The EU Chips Act calls for the EU to throw 3.3 billion euros at the goal from its budget, and for research and development to be reinforced.

A monitoring system to detect budding supply shortfalls is meant to alert the European Commission early enough so it can act urgently to head them off.

(with AFP)