By Heiko Willems, EESC Employers' Group

Semiconductors are an essential component of many different economic sectors and areas of life – both for industry and consumers. Moreover, the green and digital transition targets cannot be met without semiconductors. The European Chips Act, presented by the European Commission on 8 February 2022, should guarantee the EU's security of supply, resilience and technological leadership in semiconductor technologies and applications.

Strengthening the European semiconductor ecosystem requires private investment and significant support from the public sector. Therefore, the Commission plans to invest EUR 43 billion in the upcoming years. However, a major chunk of the budget will only be reallocated from other programmes and is only about a third of what China aims to mobilise by 2025. At the same time, granting significant State Aid could lead to investments which are not commercially sustainable and could have a negative impact on the market.

The EU must also focus on the needs of European industry. Proficiency in small feature sizes (< 10 nm) is not the sole determining factor in the success of the semiconductor ecosystem. The strengths of Europe's semiconductor industry must also be considered.

The semiconductor value chain is one of the most globalised. Therefore, establishing a closed value chain in every part of the world would not make economic sense. Rather, a detailed analysis of the strengths and weaknesses of the European semiconductor ecosystem should serve as the starting point for a debate on how targeted investments could increase Europe's resilience. In parallel, the EU should strengthen international partnerships.

This situation must also be taken into account when it comes to the envisaged emergency measures, which are extremely far-reaching. Prioritisation of orders for critical sectors, common purchasing schemes and export controls are extensive market interventions that must be reserved for exceptional situations.

In its June Plenary the EESC will discuss the opinion A Chips Act for the EU (INT/984).