European Commission President Ursula von der Leyen announced on Thursday (Feb. 3) that the commission will propose new legislation to deal with microchip shortages in Europe, the European Chips Act, as early as next week.
The proposal aims to increase microchip production across the continent and reduce dependency on suppliers from outside Europe.
“By 2030, 20% of the world’s microchips production should be in Europe. That’s twice as much as today, in a market that is set to double in the next decade. So it means quadrupling today’s European production. The European Chips Act will back this ambition with considerable investment,” said von der Leyen in a speech.
The text of the proposal isn’t public yet, but von der Leyen explained that the proposal will focus on five areas:
1: Investment in R&D in areas where Europe is already strong, like transistors and artificial intelligence
2: Investment in chip design and in pilot lines for prototypes, bridging the gap between the laboratory and the actual manufacturing
3: Increased production capacity — Europe is poised to provide public support to attract private investment and for that, it is also planning to change State aid rules to allow, for the first time, public support for European “first of a kind” production facilities
4: Support for smaller companies in accessing skills, industrial partners and equity finance
5: Strengthened cooperation with like-minded partners such as the U.S. and Japan to tackle bottlenecks and diversify the number of suppliers
Once the regulation is proposed, it will go to the European Parliament (EP) where some amendments may be introduced — but given the importance of this legislation for the commission, it is possible that the differences will be ironed out before the text goes for a vote.
“We depend on state-of-the-art chips manufactured in Asia. So this is not just a matter of our competitiveness. This is also a matter of tech sovereignty. So let’s put all of our focus on it,” said Thierry Breton, EU commissioner for the internal market.
Europe is immersed in a regulatory spree to set modern rules for Europe’s digital sector. The EP has already approved the Digital Markets Act, aimed at setting new rules for online platforms, and the Digital Services Act, to better control harmful content and illegal content on online platforms. These new rules could enter into force in late 2022 or early 2023. In addition, last year the Commission proposed the Artificial Intelligence Act, the first of its kind, to regulate AI and to harmonize the different regulatory frameworks from the 27 member states. The first debates in the EP about this law kicked off last week, and the text could be approved by year-end. The European Commission also proposed a regulation on crypto assets last year that could be adopted during this year.
Read more: EU Seeks Path to Global Tech Influence Through 5G, A.I. Standard Setting
With this announcement, the commission starts another busy year for regulators in Europe. In addition to the European Chips Act, the commission is expected to present later this month or in March the Data Act, which will give businesses and individuals more control over the data they produce while using a connected device. Also this year, the Cyber Resilience Act will likely be proposed, which will establish common security standards for all connected devices in Europe.
Europe is building the regulatory “rails” for the new technology that will drive the digital transformation — not only in the region, but in the world — including A.I., crypto assets, microchips and online platforms. By setting new regulatory frameworks, the commission expects to offer European companies a “first mover” advantage to reap the benefits of some of the latest technological innovations.
Read also: EU Parliament Committee Urges Member States to Design a Roadmap for AI
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