2023-06-29 11:21:34
If there is one area in which the EU has already gone far enough in its reflection with a view to limiting its dependence on the rest of the world and “reduce strategic dependencies”as discussed at the European Council in Brussels on Thursday, it is indeed that of microchips, these components without which electronic devices, household appliances and other cars or medical devices cannot function.
In February 2022, the European Commission unveiled its “Chips Act”, a crisp text in many respects. On the one hand, this “semiconductor regulation” showed the ambition to stimulate the production of these electronic chips on the scale of the European continent. On the other hand, this text immediately appeared as a sort of “gold standard” in Brussels, with objectives and processes that could be replicated in different sectors – in order to strengthen other parts of European industry.
“This initiative was born in a context of scarcity of semiconductors during the pandemic, which had blocked all production chains in the automotive sector, relates Elvire Fabry, researcher at the Jacques-Delors Institute. The United States launched its own initiative, and the European response quickly followed, not with an objective of self-sufficiency on all segments of the value chain of a very complex technology, but by highlighting the need, for Europe, to also be able to respond to rapidly growing global demand. »
20% market share target
The co-legislators (States and MEPs) then got into the saddle and, for months, negotiated this text (101 pages, all the same), paragraph by paragraph, line by line, word by word. Finally, in April 2023, an agreement was reached, paving the way for the production of more “made in Europe” semiconductors. And for good reason, the stated objective of the EU is to capture, by 2030, 20% (at least) of the world chip market (against around 9% currently).
To achieve this, the EU is relying on a strategy based on financial incentives, in other words on the granting of subsidies and on the flexibilization of the rules governing State aid. Thus, in April, the Commission gave the green light to three-color aid of 7.4 billion euros intended for STMicroelectronics and GlobalFoundries in Crolles, near Grenoble, to “build and operate a new microchip production facility in France”. The European executive is convinced of this: “The measure will strengthen Europe’s security of supply, resilience and digital sovereignty. » In total, 43 billion euros of public and private investments should be mobilized for the whole of Europe.
Avoid being too dependent on Taiwan
In May, while attending the inauguration in Dresden of a plant of Infineon Technologies AG, Germany’s largest semiconductor manufacturer, Commission President Ursula von der Leyen promised that “from 2026 semiconductors (would) produced here on a large scale”. She saw it “very important news for Europe”, and this while “the world center of gravity of the production (of semiconductors) is located in Taiwan and South Korea, in a region likely to experience tensions at any time”.
Germany will also support to the tune of 10 billion euros the future factory of the American semiconductor giant Intel in Magdeburg (Saxony-Anhalt). Apart from the “Silicon Saxony” across the Rhine and Grenoble, Brussels also relies heavily on cities such as Louvain in Belgium, Eindhoven in the Netherlands or Barcelona in Spain, where research and development (R & D) activities in the fields of advanced semiconductors are going well.
Derogating from state aid rules in Europe
In addition, in June, the EU approved no less than 68 projects involving 56 companies in some fifteen different countries, within the framework of an “important project of common European interest” (or “IPCEI” in Brussels jargon ) which makes it possible to derogate from the classic rules governing State aid in Europe. This, the Commission hopes, will reduce Europe’s dependence on the design, packaging and assembly of chips (especially the smallest ones, which have hitherto been neglected by companies from the Old Continent ).
Internal Market Commissioner Thierry Breton has made these chips his obsession. Rare are the interventions in the media in which they do not mention them. For him there is no doubt that “Europe is becoming the ‘hot spot’ (hotspot) world for the manufacture of next-generation semiconductors”. But on the other hand, to guard against possible supply disruptions linked to Chinese attempts to take control of Taiwan, the United States has also largely pressed the accelerator, by providing nearly 40 billion dollars in incentives. to production and 13 billion for R&D.
The problem of too much dependence
Washington has also decided to cut off China from American know-how in the manufacture of semiconductors. Ursula von der Leyen has already promised “by the end of the year” an initiative that could go in the same direction. For the time being, at the European Council, the 27 leaders will be able to consider the “economic security strategy” freshly unveiled by Ursula von der Leyen.
According to the German leader, adopting such a roadmap is a first on a continental scale. The document aims to coordinate between Europeans – Commission, States and companies – the assessment of the risks that weigh on their economy. Unsurprisingly, the problem of too much dependence is at the top of the table.
China in sight
For Elvire Fabry, “just as a European industrial policy worthy of the name is a new brick in the European agenda, adopting a strategy on economic security is a change of doctrine for an economy that intends to remain open and then that the control of investments or exports is traditionally the responsibility of the States”.
At the same time, the EU has embarked on a vast project to reduce its dependence on imports of rare earths crucial for the production of many other technologies, such as batteries or wind turbines. There “economic security strategy” indeed has an obvious target, even if it is never named: China.
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Commodities: Paris, Berlin and Rome want to cooperate better to free themselves from China
Paris, Berlin and Rome will deepen their cooperation to secure access to critical raw materials, essential to their industry. Worried about the dependence of European industrialists on China for many raw materials, the European Commission presented on March 16 a regulation intended to secure supplies, from lithium to cobalt, including nickel, for car batteries. The German, French and Italian economy ministers called on Monday 26 June for a “quick conclusion” discussions for a text ” ambitious “.
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