The plans are a part of European Union’s (E.U.’s) wider proposal called Digital Compass 2030
The European Commission has plans to manufacture 20% of cutting-edge computer chips by the end of the 2030.
In terms of value, it wants to boost production which stood at 10% in 2020. The move is aimed at meeting the increasing demand from the automobile industry.
The plans are a part of European Union’s (E.U.’s) wider proposal called Digital Compass 2030. Under this, E.U. plans to develop bloc’s first quantum-accelerated computer by 2025, ensure that all households have access to gigabit internet speeds.
The plan also intends to employ 10 million information and communications tech specialists, up from 7.8 million in 2019, with a focus on bringing more women into the industry.
The E.U. intends to nudge individual governments into action by publishing an annual review of progress, but will have to leave it up to others to take the steps required for a rise in chip production output.
As of now, Taiwan based Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea based Samsung dominate the chip market. The United States (U.S.) and China are also eyeing to increase their capacity and emerge as hub of cutting-edge computer chips.
Speaking on the occasion, the Executive Vice President of the European Commission for A Europe Fit for the Digital Age – Margrethe Vestager said, “We are in a sort of paradoxical situation where Europe is using a lot of these different types of technology, but we’re producing little.”
She also said, “Yet [chip] production is reliant on machinery produced in Europe. So… there is an interdependency here.”
It is to be noted that setting-up a cutting-edge fabrication plant is hugely expensive. According to a report by U.S. based Semiconductor Industry Association (SIA), a large plant can cost up to U.S. $ 20 billion (£ 14.3 billion) to build and kit out. It takes years to make profit from such a plant. Moreover, it is hugely challenging to master the latest state-of-the-art processes required to manufacture the smallest transistors possible.
The European Commissioner for Internal Market – Thierry Breton had previously made the case for a major new fabrication plant to be built locally. But he acknowledged that it was still unclear whether this would involve offering tax cuts to woo leading semiconductor giants like TSMC, Samsung or another major player to establish a new site within Europe.
Breton said, “We have had some voluntary discussions with companies that have this know-how. So we have opportunities to do this with a partner – it may be a good idea – but nothing has been decided yet.”
The E.U. is also concerned how it might get caught up in the crossfire of a tech trade war between the two superpowers. Former U.S. President – Donald Trump’s Administration stopped ASML Netherlands B.V., from exporting its most advanced machines to China’s biggest chipmaker Semiconductor Manufacturing International Corporation (SMIC). ASML is a Dutch firm whose products use special light to carve transistors in silicon wafers. U.S. had also imposed sanctions on China based Huawei Telecommunications. This led the United Kingdom (U.K.) Government barring the Chinese firm from future involvement in its 5G networks.
