Top Highlights

• First, absolute strategic autonomy is unlikely to be achieved, as dependencies on third countries will likely remain, including for rare-earth elements and other production materials necessary for advanced semiconductor manufacturing.
• The EU Chips Act aims to reverse this trajectory by launching a broad investment program along three lines of effort. The first pillar of the act supports large-scale technological capacity building and innovation in cutting-edge chips. The second pillar provides large-scale investments in production capacities. The third pillar aims to improve the...
• The first pillar is centered around a public-private partnership billed as the “EU Chips Joint Undertaking,” which is composed of 25 EU member states, Israel, Turkey, Norway, the European Commission, and hundreds of companies and research centers.
• Four months after it was introduced, there is some evidence that the EU Chips Act is already spurring investment. Early and promising signs include Intel’s commitment to build a $19 billion semiconductor fabrication plant in Germany as part of a stated investment in Europe of $90 billion. STMicroelectronics and GlobalFoundries signed up with the Fr...
• With both the United States and Europe developing measures to support the semiconductor industry, cooperation between these two blocs is crucial to void a subsidy race—a sure sign of tension between industrial and competition policy.

Domain