Publication date: April 04, 2025
Chips, also known as semiconductors, are the foundation of all electronic products and play a key role in modern economies and our daily lives. Without them, digital transformation would not be possible, and their importance reaches across industries such as automotive, telecommunications, data processing, space, defence, smart devices and gaming. The recent global chip shortage has disrupted supply chains, leading to shortages in products from cars to medical devices. In some cases, this has forced factories to halt production.
The European Chips Act is in response to these challenges. It aims to make Europe more competitive and resilient in semiconductor technology. It will give Europeans the chance to strengthen their technological leadership and achieve their digital and green transformation goals. In addition, the development of the semiconductor industry can create new jobs in regions that were not considered technology hubs until recently. The document aims not only to strengthen the semiconductor ecosystem in the European Union, but also to ensure the stability of supply chains, reduce external dependencies and enable a faster response to changing market needs. This is a key step towards the EU’s technological sovereignty, as well as towards achieving the goal of doubling the global share of the semiconductor market to 20% by 2030.
These are:
– strengthening Europe’s leadership in research and technology;
– developing and strengthening Europe’s capacity to innovate in the design, production and packaging of advanced chips;
– establishing the right framework to scale up production by 2030;
– addressing the skills shortage and attracting new talent;
– increasing knowledge of global semiconductor supply chains.
To achieve these goals, three key actions are planned: – the Chips for Europe initiative, which aims to support capacity building and large-scale innovation;
– the development of a security framework that will support investments in production facilities, ensuring security of supply and the resilience of the EU semiconductor sector;
– The creation of tools and methods for anticipating semiconductor shortages and related crises, as well as for responding to them, aims to ensure continuity of supply. In this context, several key elements can be distinguished:
– Supply Chain Emergency Notifications (SCAN),
– Crisis Phase and a set of tools that can be used in the event of an emergency,
The European Semiconductor Board (ESB) plays an important role by providing the Commission with advice, support and recommendations in three main areas of activity:
– Monitoring the situation and responding to crises,
– Advice on the initiative for the Public Authorities Board of the Joint Undertaking on Chips,
– Consultation with the Commission on decisions on granting the status of IPF and OEF.
Actions within the framework of the act.
Art. 5 of the Act describes in detail what tasks will be implemented.
Under operational objective no. 1:
– creation and management of a virtual design platform, accessible throughout the Union, which would integrate existing and new design functions with extensive libraries and tools for automated electronic design (EDA),
– strengthening design capabilities by supporting innovative solutions, such as open processor architectures, chiplets, programmable chips and modern types of memories and processors – manufactured in accordance with the principles of safety by design,
– expanding the semiconductor ecosystem by integrating vertical market sectors, including health, mobility, energy, telecommunications, security, defence and space, which will contribute to the implementation of the Union’s green, digital and innovative programmes.
Under Operational Objective No. 2:
– strengthening manufacturing capabilities for next-generation chips and equipment, by integrating research and innovation activities and preparing the development of future-generation technologies, including latest-generation technologies, FD-SOI (fully depleted silicon on an insulator), new semiconductor materials and heterogeneous system integration;
– supporting large-scale innovation by providing access to new or existing pilot lines, enabling experimentation, testing, process control and validation of new design concepts combining key functionalities; – providing support to integrated manufacturing facilities and open EU factories by granting preferential access to new pilot lines, as well as fair access to these lines for a wide range of users of the EU semiconductor ecosystem.
For Operational Objective 3:
– Develop innovative design libraries dedicated to quantum chips,
– Support the development of new and existing pilot lines, clean rooms and factories for prototyping and production of quantum chips aimed at integrating quantum circuits and control electronics,
– Expand facilities for testing and validation of advanced quantum chips to be produced in pilot lines to bridge the feedback gap between designers, manufacturers and users of quantum components.
For Operational Objective 4:
– Strengthen capabilities and make a wide range of expertise available to stakeholders, including start-ups and small and medium-sized enterprises (SMEs) as end-users. Facilitate access to these capabilities and facilities and support their efficient use. Addressing the knowledge and skills gap and mismatch requires strategies to attract, mobilise and retain new talent in research, design and production. It is crucial to support the education of appropriately qualified staff in STEM (science, technology, engineering and mathematics) fields at postdoctoral level. These actions aim to strengthen the semiconductor ecosystem by offering students appropriate training opportunities, such as dual training programmes and introductory programmes for students. It is also worth focusing on upskilling the existing workforce.
Under operational objective 5, these actions include: – increasing the efficiency of Union budget spending to achieve a greater multiplier effect in attracting private sector financing,
– providing support to companies that face difficulties in accessing financing and addressing the need to strengthen economic resilience across the Union and Member States,
– accelerating and improving the availability of investments in chip design, manufacturing technology and semiconductor integration. In addition, attracting financing from both the public and private sectors will be important, contributing to increased security of supply and the resilience of the semiconductor ecosystem throughout the value chain.
Institutions
The abovementioned European Semiconductor Board shall have the objective of providing consultation and support to the Commission and of formulating recommendations in accordance with this Regulation, in particular by:
– advising the public authorities of the Joint Undertaking on Chips regarding the Initiative
– assisting the Commission in assessing proposals for integrated manufacturing facilities and open Union factories,
– exchanging views with the Commission on the most effective methods of ensuring, in accordance with Union and national law, the effective protection and enforcement of intellectual property rights, confidential information and trade secrets, with the appropriate involvement of all stakeholders in the context of the semiconductor sector,
– discussing and preparing guidance on sectors and technologies that may have a significant societal or environmental impact, as well as being of strategic importance for security, requiring certification as green, trustworthy and safe products,
– addressing strategic mapping, monitoring and preventive action and crisis response,
– advising on tools to be used in times of crisis,
– providing recommendations and guidance on the coherent implementation of this Regulation, supporting cooperation between Member States and the exchange of information on issues related to This Regulation.
The European Semiconductor Board also advises the Commission on matters related to international cooperation in the semiconductor field. In this context, the Commission has the opportunity to take into account the views of various stakeholders, including the views of the Processor and Semiconductor Industrial Alliance.
In the framework of the implementation of activities funded by the Initiative, it is possible to establish a legal entity called the European Infrastructure Consortium on Chips (ECIC). More than one such consortium may be established. The ECIC shall acquire legal personality on the date of entry into force of the implementing act of the Commission, shall have in each participating Member State the most extensive legal capacity and powers accorded to legal entities under national law, in particular the capacity to acquire, hold and dispose of movable and immovable property as well as intellectual property and to conclude contracts and to engage in legal proceedings, shall have a single registered office located in the territory of one of the Member States, shall be formed by at least three members, referred to as ‘founding members’, comprising Member States or public or private legal entities from at least three different Member States, or a combination thereof, with a view to ensuring broad representation throughout the Union, shall allow, after the adoption of the implementing act, other Member States to join the consortium at any stage as members and other public or private legal entities to join on fair and reasonable terms as laid down in the statutes of the ECIC. In addition, Member States that do not contribute financially or in kind may join the ECIC as observers without voting rights, upon notification . The ECIC also appoints its coordinator.
In order to achieve operational objective 4 of the Initiative, a European Network of Competence Centres for semiconductors, system integration and design is being established. It is composed of competence centres selected by the Joint Undertaking on Chips. Member States will identify candidates for competence centres in accordance with their national procedures and administrative and institutional structures, following an open and competitive procedure. These centres carry out a wide range of activities for the benefit of the Union industry, working closely with SMEs, mid-caps, research and technical organisations, universities and the public sector, as well as other key stakeholders along the semiconductor value chain. In particular, their tasks include:
– ensuring access to design services and tools under Operational Objective 1 of the Initiative and making available pilot lines supported under Operational Objective 2 of the Initiative,
– raising awareness and providing stakeholders with the necessary know-how, expertise and skills to accelerate the development of new semiconductor technologies, semiconductor manufacturing, equipment, design options and system concepts, as well as the integration of new semiconductor technologies, making efficient use of the infrastructure and other resources available in the Network,
– raising awareness and sharing expertise, know-how and services, including readiness for system design, new and existing pilot lines, and supporting skills and competence building activities supported by the Initiative,
– facilitating the transfer of expertise and know-how between Member States and regions, while encouraging the exchange of skills, knowledge and best practices and supporting joint programmes,
– developing and managing specific training activities in semiconductor technologies and their applications to support the development of the talent pool through the acquisition and re-skilling of and to increase the number of students and improve the quality of education in relevant fields up to doctoral level at universities in the Union. Particular attention will be paid to the participation of women in these projects.
Integrated manufacturing facilities are pioneering facilities specialising in semiconductor manufacturing. Where appropriate, they also design and manufacture equipment and key components used in the semiconductor manufacturing process within the EU. These facilities have the capacity to integrate different stages of the supply chain, which significantly contributes to the security of supply and the resilience of the semiconductor ecosystem in the Union. In addition, where appropriate, they can also support the security of global semiconductor supply chains.
Open EU fabs are the first of their kind to manufacture semiconductors within the European Union. They offer production capacity to non-affiliated companies, which significantly contributes to the security of supply in the internal market and strengthens the resilience of the EU semiconductor ecosystem. In addition, where appropriate, they can also support the security of global semiconductor supply chains.
In addition, each Member State is required to designate one or more national authorities responsible for ensuring the application and implementation of this Regulation at national level.
Mapping. The Commission, in cooperation with the European Semiconductor Council , is undertaking a strategic mapping exercise of the EU semiconductor sector. It shall regularly submit the consolidated results of the exercise to the Council. This mapping aims to provide a detailed analysis of the Union’s strengths and weaknesses in the context of the global semiconductor market and to identify key elements such as:
– the important products and critical infrastructure in the internal market that are dependent on the supply of semiconductors,
– the main sectors in the Union that use these products, together with their current and projected needs and dependencies, including an assessment of potential risks to security of supply resulting from insufficient investment,
– the key segments of the Union semiconductor supply chain, which include design, design software, materials, manufacturing equipment, semiconductor production and outsourced back-end activities , – the technological characteristics and dependencies on third country technologies and suppliers, as well as the bottlenecks in the Union semiconductor sector, including the availability of inputs,
– the current and projected skills needs and effective access to a skilled workforce in the semiconductor sector.