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EU Advances €43 Billion Plan to Make More Semiconductors

EU Advances €43 Billion Plan to Make More Semiconductors
A 300 millimetre silicon wafer at the Globalfoundries Inc. semiconductor plant in Dresden, Germany, on Thursday, Aug. 12, 2021. Globalfoundries hosted German election front-runner Armin Laschet today as he comes under pressure to regain the initiative after a rocky several weeks hit the conservative bloc’s support. Photographer: Liesa Johannssen-Koppitz/Bloomberg

European Union negotiators agreed on a final version of a €43 billion ($47.2 billion) bill to boost the bloc’s production of semiconductors and reduce its exposure to supply chain disruptions amid growing tensions with China. 

The agreement comes as the Biden administration presses for more restrictions on the sale of advanced chip-making equipment to China, a major global production hub. The pressure has also spurred a push to develop production in the US and its allies.

“The European vision to double our global market share by 2030 to 20%, and produce the most sophisticated and energy-efficient semiconductors in Europe, is already attracting substantial private investment,” the EU’s internal market chief, Thierry Breton, said in a statement. “Now we are mobilizing considerable public funding and the regulatory framework to turn this vision into reality.”

One of the most contentious parts of the negotiations was the budget after EU countries cut €400 million from the European Commission’s initial plan, which called for reallocating money from the EU’s research budget for semiconductors. Negotiators made up the shortfall with funds mostly from outside the research budget, according to people familiar with the matter.

Read More: EU Nations Advance €43 Billion Plan to Become Semiconductor Hub

South Korea approved a bill on March 30 to provide more tax breaks for companies investing in semiconductor manufacturing. Last year the US passed a bill that provides about $50 billion of federal money to support domestic production of semiconductors and foster a skilled workforce needed by the industry.

The agreement will become law once it is approved by the European Parliament and EU member countries and then published in the Official Journal.


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