Fishing for Chips: Assessing the EU Chips Act
China, the United States, and the European Union (EU) are currently developing strategies for semiconductors aimed at financing R&D and the installation of new factories on their territories, in particular through subsidies. The EU Chips Act, announced in February 2022, represents a real break in Europe's industrial policy.
Key Takeaways:
- Drawing lessons from the ongoing shortages in chip supply, the United States, China, and the European Union are adopting industrial policies in the semiconductor sector in search for supply chain security and economic and technological competitiveness.
- The EU Chips Act in particular represents a notable shift from a long-held opposition to industrial subsidies seen as detrimental to international competition.
- The proposal will support R&D in Europe, provide a legal basis for EU member states to use subsidize domestic semiconductor manufacturing, and facilitate trade measures to intervene in the supply chain in times of crisis.
- This new global subsidy race to build foundries carries the risks of channeling billions in public funds into unprofitable investments, due to the complexity of semiconductor production and risks of overcapacity in certain segments.
- To avoid that, cooperation with like-minded partners of the EU, especially the US, appears necessary but still needs to be worked out.
This briefing is available in two languages:
- in English : Fishing for Chips : Assessing the EU Chips Act
- In French : Marché aux puces : analyse de la loi européenne sur les semi-conducteurs
Available in:
Regions and themes
ISBN / ISSN
Share
Download the full analysis
This page contains only a summary of our work. If you would like to have access to all the information from our research on the subject, you can download the full version in PDF format.
Fishing for Chips: Assessing the EU Chips Act
Author(s)
Related centers and programs
Discover our other research centers and programs
Center for Geopolitics of Technology
Artificial intelligence (AI), 5G, cybersecurity, robotics, semiconductors, space... Technology, especially in the digital domain, is now deeply affecting all human activities and, by extension, international relations. The resulting political, strategic, economic and social issues manifest themselves at multiple political scales involving states, international organizations and private companies. The dynamics of international competition and cooperation are transformed.
It is to respond to these challenges that Ifri is launching the Geopolitics of Technology program in the fall of 2020, which builds on the work it already carried out on these subjects for several years.
The program takes a resolutely European approach to international issues related to so-called critical technologies. Its work is organized around four cross-cutting themes:
- Power: redistributions of power caused by new technologies, in particular digital; military and dual innovations; transformations of international competition;
- Sovereignty: definition of critical infrastructures and technologies; industrial and innovation policies in strategic sectors; opportunities and risks associated with international value chains;
- Governance: ethical and legal issues; interactions between companies, states, international organizations and users; public-private partnerships and GovTech;
- Society: political and social impacts of technological innovations; risks and opportunities for the future of work, health, the fight against climate change; connectivity and economic development.
Find out more
Discover all our analyses
A "DeepSeek Moment"?
DeepSeek, hailed as a champion of Chinese AI, represents less a revolution than a significant optimization of existing technologies. Doubts remain regarding the figures put forward by the start-up, inviting a more measured response to the media hype surrounding China’s technological catch-up. Nonetheless, DeepSeek signals the need to question an economic model based solely on the race for computational power. By betting on open innovation, Europe can carve out its own path in a competition that is far from being a zero-sum game.
Artificial Promises or Real Regulation? Inventing Global AI Governance
The risks inherent to the unregulated use of AI, a key technology and vector of profound transformations within societies underline the pressing need to harmonize governance efforts at the international level. The Summit for Action on Artificial Intelligence to be held in Paris in mid-February could be an unprecedented timely occasion to agree on a global governance framework of AI for the public good.
The European Space Model: Renewing Ambition in a Changing Strategic Landscape
The European space model, based on science, cooperation and trade, is now being undermined by changes in international relations and the economic upheavals brought about by New Space. In light of the war in Ukraine and American disengagement, Europe needs to rethink its strategy by adding a fourth pillar dedicated to defense, in order to strengthen its sovereignty and deter possible aggression against the continent.
AI, Data Centers and Energy Demand: Reassessing and Exploring the Trends
The information and communication technologies sector today accounts for 9% of global electricity consumption, data centers for 1-1.3%, and artificial intelligence (AI) for less than 0.2%. The growing energy demands of cloud services first, and now AI workloads (10% of today’s data centers electricity demand), have exacerbated this trend. In the future, hyperscale data centers will gain shares amongst all kinds of data centers and AI will probably account for around 20% of data centers electricity demand by 2030.