Europe calls for 'Chips Act 2.0' to counter China's semiconductor dominance
Brussels, Tuesday, 3 December 2024.
SEMI Europe urges the EU to strengthen its semiconductor strategy as global competition intensifies. The industry group pushes for a unified approach to counter state-subsidized competition from China and calls for expedited approvals for strategic tech projects. The recommendations follow Mario Draghi’s report highlighting the need for a centralized EU budget. The stakes are high as Europe aims to secure its position in the global chip market, targeting 20% market share by 2030. The proposed policies would support both cutting-edge and legacy chip production, crucial for Europe’s green transition. Industry leaders ASML, Infineon, and STMicroelectronics back these initiatives to enhance supply chain resilience and maintain technological independence.
impact on european semiconductor market
The proposed Chips Act 2.0 aims to increase the EU’s semiconductor market share to 20% by 2030. This ambitious target reflects Europe’s intent to reduce reliance on Chinese imports and enhance domestic capabilities. The current EU market share is significantly lower, illustrating the need for strategic investments and policy enhancements. With the EU’s growing dependence on Chinese imports, rising from 22% in 2017 to 25% in 2023, the new policies are crucial in reversing this trend and fortifying the European semiconductor industry[1].
investor outlook and market reactions
Investors are closely monitoring the implications of the proposed policies on European semiconductor stocks. Companies like ASML, Infineon, and STMicroelectronics could see a positive impact on their stock values. The market views the Chips Act 2.0 as a catalyst for growth, potentially increasing the financial stability of these firms. With the global semiconductor market expected to expand, European firms are positioned to benefit from increased production capabilities and reduced competition from state-subsidized Chinese companies[2].
strategic significance and global competition
The EU’s strategic push for semiconductor independence is a response to heightened global competition, particularly from China and the US. China’s dominance in the semiconductor supply chain, coupled with its state-subsidized practices, poses a significant challenge to European firms. The Chips Act 2.0 is designed to level the playing field, supporting both advanced and foundational chip production. This initiative aligns with Europe’s broader goals for economic and technological independence, ensuring a stable and resilient supply chain amidst geopolitical tensions[3].
expert opinions on policy implications
Experts believe that the Chips Act 2.0 could significantly enhance Europe’s competitive position in the global semiconductor market. Laith Altimime, President of SEMI Europe, emphasized the need for a comprehensive legislative framework to drive sustainable innovation. Aligning semiconductor policies with the EU’s Green Deal is expected to attract investments, fostering an environment conducive to technological advancements. The integration of semiconductors into the green transition is seen as a key factor in reducing carbon footprints and achieving environmental goals[4].