With its goal to produce 20% of the world’s semiconductor manufacturing by 2030, the European Union has agreed to a $47 billion investment plan to accelerate chip making in the region.
Called the European Chips Act, the investment mirrors the CHIPS and Science Act that was passed in August in the U.S. to accelerate semiconductor manufacturing in the country to help diversify the semiconductor supply chain.
"We need chips to power digital and green transitions or healthcare systems," said Margrethe Vestager, EU commission VP about the funding.
Part of the EU plan is to move the semiconductor supply chain to its own backyard so that when disruptions happen, such as the COVID-19 pandemic that occurred in 2020, it will be more resilient and spread out in the world instead of aggregated in Asia, specifically Taiwan and Korea. However, other regions are making similar moves including the U.S. and Canada. And the foundries already in control — TSMC and Samsung — are not just letting it happen and are ramping up their own investments.
According to Reuters, the European Commission originally proposed funding only cutting-edge chip plants but the scope has widened to the entire semiconductor value chain such as mature technologies and research and design facilities.
Already funding
Since the European Chips Act was announced last year, the region has attracted more than $100 billion in public and private investment, according to the EU. These investments come as member nations are seeing the benefits of having regional manufacturing in their own back yard as well as the revenue and jobs return these fabs and factories bring.
Since the announcement of the European Chips Act, Intel has become a big investor in the region. First, it pledged to invest $18.6 billion for a mega-site in the Magdeburg location as part of a spending spree that will cover some $87 billion over the next decade and numerous countries.
This will include the fabs in Germany, a new design hub in France, a back-end packaging and assembly plant in Italy and expand foundry services in Poland, Ireland and Spain.
Spain is on board to provide a boost in semiconductor manufacturing with a pledge of nearly $12 billion in funding. The plan will be mainly financed through the EU’s pandemic relief funds with approval pending.
Other companies are investing in Europe as well after the Chips Act was announced. This includes:
- WolfSpeed’s first European fab in Germany.
- Bosch expanding its fabs to the tune of $463 million.
- A back-end facility from GlobalFoundries in Dresden.
