The European Commission has shared further details of its strategy to make Europe a leader in the microchips sector.

The European Chips Act sets out a new framework to help the EU develop a strong semiconductor industry from research to production, along with a resilient supply chain to “make Europe a leader in this market, which is so important”, Commission president Ursula von der Leyen said.

First proposed last September, the act includes plans to loosen funding rules to support new “First of a kind” semiconductor production facilities.

The Chips Act will enable an additional €15bn to public and private investments by 2030, along with a new coordination mechanism between the EU member states and the Commission for monitoring the supply of semiconductors, estimating demand and anticipating shortages.

“The European Chips Act will be a game changer for the global competitiveness of Europe’s single market,” von der Leyen said. “In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions. And in the mid-term, it will help make Europe an industrial leader in this strategic branch.

The Act seeks to boost the EU’s production amid a global chip shortage that has been a cause for alarm in many industries. The Commission noted that last year, production in the car sector decreased by 33pc in some member states.

“Chips are necessary for the green and digital transition – and for the competitiveness of European industry,” European Commission vice-president Margrethe Vestager said. “We should not rely on one country or one company to ensure safety of supply. We must do more together – in research, innovation, design, production facilities – to ensure that Europe will be stronger as a key actor in the global value chain.

“It will also benefit our international partners. We will work with them to avoid future supply issues,” she added.

Last March, Vestager and internal market commissioner Thierry Breton unveiled the Digital Compass strategy for the EU. This set ambitions for Europe to manufacture one-fifth of the world’s semiconductors by 2030 and to build its first quantum computer.

Breton went on in May to confirm that the EU was prepared to invest “significant” amounts in the effort.

The European Parliament will discuss the Commission’s proposals surrounding the European Chips Act. If passed, it will be the first major legislative effort in this area.

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