The semiconductor shortage is complicated by a very concentrated market with high barriers to enter. Private investments in large production facilities may likely require public support.

Where such public support includes state aid that does not fall under existing guidelines, the Commission recognises the need for a case-by-case assessment based on the EU Treaty.

This assessment will ensure that there are strong safeguards to ensure such aid is necessary, appropriate and proportionate, and undue competition distortions are minimised. Benefits must be shared widely and without discrimination across the European economy.

The financing for a possible European Semiconductor Fund, if deemed desirable and viable, may be outlined in the upcoming European Chips Act.

The European Chips Act will not address today’s crisis overnight: it will develop a strategy to accelerate Europe’s technology and innovation leadership to create a thriving semiconductor ecosystem, reduce its dependencies, and strengthen its presence in the global supply and value chain.