EU: chip law comes into force to reduce dependence on Asia

The European Chip Law, with which the European Union wants to double its semiconductor production to cover 20% of global manufacturing to reduce its dependence on Asiacame into force this Thursday.

The EU hopes to reduce its dependence on Taiwan and South Korea, which have almost a global duopoly in chip manufacturing – they produce 100% of the most advanced ones – and enter the global race to boost a sector that China, the United States and Japan will allocate million-dollar subsidies in the coming years.

To achieve this, we want to identify factories “first of its kind” due to their production processes or their level of innovation, which will benefit from additional public aid and accelerated administrative procedures.

Furthermore, with the aim of promoting research into cutting-edge chips and bringing innovations to market, the law provides for creating pilot lines in which to experiment with advanced semiconductors to which large factories have priority access, as well as supporting the development of quantum chips and making it easier for small businesses to obtain financing.

The law will also create a coordination mechanism between the European Commission and States to monitor supply chains in order to anticipate supply problems and take emergency measures in the event of a crisis.

In this scenario, Brussels could demand information from companies about the situation of their production, factories “first of its kind” They would be obliged to prioritize orders that the EU considers relevant to respond to the crisis and the European Commission could purchase chips on behalf of the Twenty-Seven.

Companies that fail to comply would face penalties of up to 300,000 euros for not providing information or periodic fines of up to 1.5% of their daily turnover for not respecting priority orders.

Source: EFE