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European Union Agrees on €43 Billion Plan to Boost Semiconductor Industry and Start Green Industrial Revolution

2023

In a bid to catch up with the United States and Asia and ignite a green industrial revolution, the European Union (EU) has finalized a €43 billion ($47 billion) plan for its semiconductor industry. The EU Chips Act, proposed by the European Commission and confirmed by Internal Market Commissioner Thierry Breton, aims to double the bloc's global chip output share to 20% by 2030, following the footsteps of the U.S. CHIPS for America Act.

Industry players warmly welcomed the confirmation of the EU Chips Act, as it promises to bring manufacturing capabilities, skills, and advancements in research and development. The plan has already attracted over €100 billion in public and private investments since its introduction last year, according to an EU official.

Commission Vice-President Margrethe Vestager emphasized the significance of chips in powering digital and green transitions, as well as healthcare systems. However, analysts caution that the EU may face challenges in closing the gap with its competitors. Paul Triolo, a China and tech expert at the Center for Strategic & International Studies, highlights the importance of relocating supply chains and the associated costs as crucial factors for the EU's success in the industry.

Originally proposed to fund cutting-edge chip plants only, the scope of the plan has been expanded by EU governments and lawmakers to encompass the entire value chain, including older chips and research and design facilities. Hendrik Bourgeois, VP European Government Affairs at U.S. chipmaker Intel, expressed approval of the deal, viewing it as a testament to the EU's commitment to securing its future prosperity. The EU's ambitious endeavor to boost its semiconductor industry and usher in a green revolution holds significant implications for its economic and technological standing in the global arena.

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