04 Apr, 2022

Chip shortage

04 Apr, 2022

The EC will plough 43bn euros (£36bn) of public and private investment into Europe’s semiconductor industry. The Commission hopes to, among other things, increase the region’s share of global chip manufacturing – from less than 10% to 20%.

China poured $33bn (£25bn), purely in subsidies, into its own chip manufacturing industry in 2020. South Korea, also plans to spend almost half a trillion dollars via support packages, tax incentives and other measures over the next decade.

In order for Europe and the US – which also has ambitions to increase its market share in this sector – to truly compete, huge sums of money are required from both public and private sources, says Anisha Bhatia, an analyst at GlobalData.

There are also relatively few firms within the EU that design new chips for use in technology products. That is in stark contrast to the US, which already has a sizeable semiconductor design industry. US firms lead the way in determining which chips actually get made. That leads to the question – what sort of chips Europe should be aiming to produce and why – as Europe is currently behind on everything and must choose its battles.