EU countries back chip plan ahead of talks with lawmakers

EU countries agreed to a EUR 45 bn plan to fund the production of chips on Wednesday, putting the 27-country bloc a step closer to its goal of reducing its reliance on U.S. and Asian manufacturers.

EU envoys unanimously backed an amended version of the European Commission’s proposal on chips, the Czech Republic which holds the rotating EU presidency said.

A thriving #Chips economy is a game of two halves. 1: Increased production of current #tech 2: Investment in #innovation.

Proper funding for R&D are vital to keep pace with global competitors & partners. The Chips JU & EU #budget must help secure this.https://t.co/jW15jSIigo

— Eva Maydell (Paunova) (@EvaMaydell) November 18, 2022

European Union ministers will meet on December 1 to rubber stamp the chip plan that will still need to be debated with the European Parliament next year before it can become law.

The EU executive, which is hoping state subsidies will help the bloc achieve a 20 percent share of global chip capacity by 2030, came up with its proposal after a global chip shortage and supply chain bottlenecks hit car makers, healthcare providers and telecoms operators.

Europe’s share of chip production stands at 8 percent, down from 24 percent in 2000.

The European Commission just proposed a €43 billion plan to combat the ongoing global chip shortage. https://t.co/V87I37J35b

— Windows Central (@windowscentral) February 8, 2022

Changes in the EC plan

Changes agreed by the envoys to the Commission’s proposal included allowing state subsidies for a broader range of chips and not just the most advanced ones. The subsidies will cover chips that bring innovation in computing power, energy efficiency, environmental gains and artificial intelligence.

EU countries also sought to curb the powers of the European Commission, saying its requests to companies for information during a crisis must be proportionate and security-focused, an EU document stated according to Reuters.

EU lawmakers still face the task of thrashing out funding for the project, the document said.

The Commission had earmarked money from research programmes and unspent funds from other schemes, drawing criticism from some EU countries that this could unfairly benefit countries that already have chip facilities or are set to attract chipmakers.