EU Chips Act triggers further €22 billion investment into European semiconductor value chain

By Thierry Breton – European Commissioner for Internal market – Posted on Linkedin on June 8, 2023:

Today the European Commission approved a large Important Project of Common European Interest (IPCEI) on Microelectronics and Communication Technologies, with €8.1 billion of state aid, triggering €13.7 billion of additional private investment and therefore a total investment of around €22 billion in the European semiconductor supply chain.

This latest IPCEI is yet another demonstration of the EU Chips Act already triggering considerable public and private investment across the European semiconductor value chain: from materials to design, from equipment to advanced packaging.

By investing in our innovative companies, we are investing in the development and deployment of semiconductor technology critical to Europe’s technological and industrial leadership, as well as our security of supply and economic security.

This IPCEI is considerable in its size and pan-European dimension: 68 projects from 56 companies from 19 Member States (plus Norway), involving 600 indirect partners and potentially creating more than 8700 direct jobs in Europe  – and many more indirectly.

More concretely, this IPCEI is expected to expand industrial presence across the supply chain in Europe, investing in major, innovative industrial capacities on all the chokepoints of the supply chain: materials including wafers; equipment (for wafer production, chip production, packaging assembly and test); design and design automation tools; different process technologies, manufacturingpackagingassembly and tests; and systems integration.

Under the IPCEI, companies – including many SMEs – will develop innovative device technology including dedicated processors, AI chips, programmable integrated circuits (FPGAs), embedded memory, chiplets, optical interconnects as well as equipment and materials, in support of the development of innovative applications for the communications, automotive, industrial automation and consumer IoT sectors as well as AI, edge-computing and other markets.

It will for instance invest in:

  • Accelerating the development of a European supply chain for components needed for communications equipment as well as radar and space applications. Developing cybersecure connectivity capabilities and preparation of 5G/6G standards will form part of these efforts.
  • Preparing Europe for the roll-out of electric vehicles, notably to enable design and manufacturing capacity for next-generation devices and substrates for power management as well as the environmental sensors, radars and in-vehicle computers needed for highly automated driving functions.
  • Developing next-generation AI chips, combining strengths in both analog and digital, low-power computing and new generations of optical sensors will open the door to new markets in edge-AI, industrial automation and beyond.

This IPCEI is also a demonstration that excellence is everywhere in Europe as it covers projects from Member States with a less prominent chips ecosystem.

Thanks to the IPCEI, they are able to establish a strong foothold in specific domains of the value chain with very dynamic SMEs or subsidiaries of big parent companies. This is a major step forward, in particular compared to the previous IPCEI on microelectronics which already involved 32 participants from 4 Member States.

These projects sow the seeds for future production facilities in Europe which could find support as first-of-a-kind endeavours under the ambitious EU Chips Act adopted by the EU institutions in April.

In a geopolitical context of de-risking, Europe is taking its destiny into its own hands. By mastering the most advanced semiconductors, EU will become an industrial powerhouse in markets of the future.

Source: LinkedIn