EU launches €43bn push for chip factories as shortages hit manufacturing.Intel says could bolster its plans for new ‘mega fabs’.

Europe has followed the US in setting out plans for a massive increase in semiconductor manufacturing, as Brussels attempts to secure supplies of the chips that drive the global economy.

Unveiling a €43bn investment plan, the European Commission said it wanted to use state aid to promote research and production of higher technology chips used in computers, smartphones, vehicles and other products.

The coronavirus pandemic had “painfully exposed the vulnerability” of Europe’s supply chains, said commission president Ursula von der Leyen, with production lines for cars and other goods hit by shortages.

The Chips Act aims to double the EU’s share of the semiconductor market from 10 to 20 per cent by 2030, which would require quadrupling production.

The EU is following plans by President Joe Biden’s US administration for a $52bn package to subsidise semiconductor manufacturing. Other governments are also trying to improve semiconductor supply chains.

Under the plan announced on Tuesday, the European Commission and national governments would spend €11bn to build three pilot facilities for any company to use. Member states and businesses were expected to invest a further €32bn by 2030.


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