European Chips Act (semi-conductors)

In “A Europe Fit for the Digital Age”

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Ursula von der Leyen and Maroš Šefčovič's letter of intent to European Parliament President David Maria Sassoli and Prime Minister Janez Janša of 15 September 2021 mentioned an upcoming European chips act, aimed at building a state-of-the-art European semi-conductors ecosystem.

According to the European Commission work programme for 2022, released on 19 October 2021, a proposal on a European chips act was expected to be published in Q2 2022.

In her ‘State of the World' speech at the World Economic Forum on 20 January 2022, Ursula von der Leyen announced that the Commission would put forward the European Chips Act in early February 2022.

Stressing the urgent need to act, the European Commission adopted on 8 February 2022 a ‘European chips act package’ focused on the strategic objective of increasing the resilience of the EU’s semiconductor ecosystem and increasing its global market share.

The package includes:

  • a Communication on a chips act for Europe, detailing the strategy and the rationale behind the package.
  • a proposal for a Regulation of the European Parliament and of the Council establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips Act) (to be adopted by the co-legislators under the ordinary legislative procedure). The proposed framework for reinforcing the EU chip sector is based on three pillars: 
    • Pillar 1: the 'Chips for Europe Initiative', supporting large-scale technological capacity building and innovation across the EU. The actions under this Initiative will be primarily implemented through the Chips Joint Undertaking, i.e. the amended and renamed Key Digital Technologies Joint Undertaking (hence the proposal for a Council Regulation, see below).
    • Pillar 2: a framework to facilitate the implementation of projects aimed at ensuring the EU's security of supply, by attracting investments and enhancing production capacities, via so-called 'first-of-a-kind' Integrated Production Facilities (vertically integrated production facilities) and Open EU Foundries (offering their production capacity to other industrial players). 
    • Pillar 3: a coordination mechanism between the Member States and the Commission for monitoring the supply of semiconductors and crisis response to semiconductor shortages, estimate demand, anticipate shortages, trigger the activation of a 'crisis stage' and act through a dedicated toolbox of emergency measures (the Commission may oblige undertakings to provide information concerning production capabilities, production capacities, etc., and Integrated Production Facilities and Open EU Foundries to accept an order of crisis-relevant products (‘priority rated order’), or act as a central purchasing body to buy crisis-relevant products).

          A European Semiconductor Board, composed of representatives of the Member States and chaired by a representative of the Commission, will advise the Commission.

  • a proposal for a Council Regulation amending Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe, as regards the Chips Joint Undertaking.
  • a Commission Recommendation on a common Union toolbox to address semiconductor shortages and an EU mechanism for monitoring the semiconductor ecosystem. It includes includes possible crisis response measures, which Member States could discuss and consider to implement, before the Regulation enters into force.

The feedback period on the proposal was open between 14 March and 9 May 2022. The Commission received 219 contributions from stakeholders.

At the Competitiveness Council (internal market and industry), the Chips Act was presented by the Commission on 24 February 2022, and then debated on 9 June.

In the European Parliament, the lead Committee is the Committee on Industry, Research and Energy (ITRE). The Committees on the Internal Market and Consumer Protection (IMCO) and on Legal Affairs (JURI) The EU chips act 12 will be associated under Rule 57, with some shared competences on parts of the proposal. The Committee on Budgets (BUDG) will contribute with a 'Rule 56+' opinion.

On 22 March 2022, ITRE MEPs discussed the Chips Act in the framework of the structured dialogue with Mr Breton, Commissioner for Internal Market. The proposal was also discussed in ITRE with Ms Vestager, Commissioner for Competition, on 31 March 2022. Dan Nica (S&D, RO) was appointed Rapporteur in ITRE for the proposal for a regulation. A hearing took place in ITRE on 14 July. The presentation of the lead committee draft report is planned during an ITRE meeting in October 2022. The final vote on the report in ITRE is expected to take place early in 2023.

The European Economic and Social Committee (EESC) adopted its opinion on 15 June 2022. The European Committee of the Regions agreed a draft opinion at the meeting of the Commission for Economic Policy (ECON) of 8 July 2022. Adoption of the final opinion is expected at the 12-14 October 2022 plenary.

References:

Further reading

Author: Guillaume Ragonnaud, Members' Research Service, legislative-train@europarl.europa.eu

As of 20/08/2022.