ESIA Urges Increased Funding and Support for European Chip Act 2.0

An ESIA statement highlighted the need for European chip policy to steer away from export restrictions, as reported by Reuters. ESIA, representing major European chip companies like Infineon, NXP, and ST, along with research institutes such as IMEC and Fraunhofer, called for the immediate implementation of a "Chips Act 2.0."

The first European Union Chips Act, which came into effect in September 2023, had a budget of €43 billion aimed at doubling Europe's global chip manufacturing share to 20 percent by 2030. This initiative received support from national governments and industry players, signaling a strategic push towards enhancing Europe's semiconductor capabilities.

Recently, the European Chips Act underwent amendments and approvals, signaling a shift in the region's semiconductor landscape. The European Commission greenlit German plans to provide substantial support for the establishment and operation of a wafer fab, with the European Semiconductor Manufacturing Co. (ESMC) breaking ground on the project in August.

However, challenges loom over Intel's US$32 billion project to set up two wafer fab buildings in Magdeburg, Germany. Intel's financial setbacks have raised concerns about the project's viability, with production timelines being delayed pending European Union approval for subsidies from the German government.

Meanwhile, ST and Globalfoundries have entered into a partnership to collaborate on a subsidized wafer fab near Grenoble, showcasing a trend towards industry cooperation to bolster semiconductor manufacturing capabilities in Europe.

The ESIA also criticized the lack of support for chip companies facing barriers to accessing Chinese markets for their products. The statement emphasized the need for a proactive economic security approach that focuses on providing support and incentives rather than relying solely on defensive measures.