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In global competition, the EU is to be spared a microchip shortage thanks to a plan worth billions.
No modern car drives without microchips, no machine serves fresh coffee, no robot mows the lawn and even telephoning is impossible. But computer chips are in short supply. Many companies are desperately waiting for supplies – and they mostly come from Asia.
In order to make the European economy less dependent on Asian chip producers, the EU now wants to subsidize domestic research and production on a large scale – with 43 billion euros.
Unprecedented support program
Chips for everyone in Europe, announces Margrethe Vestager: In order to combat the shortage of European microchips, the EU is mobilizing billions of euros and four EU government members: the Danish Competition Commissioner, the French Industry Commissioner, the Research Commissioner from Bulgaria and of course the German President of the EU -Commission.
Europe can no longer stand on the sidelines in this strategic competition.
This is intended to give the impression that this unprecedented support program is in the European general interest. Ursula von der Leyen announced it last fall: the EU should no longer only be an international authority in research, but also in the production of chips.
Just under 10 percent of chips are now manufactured in the EU. In a few years it should be 20 percent. Action is the order of the day, says von der Leyen.
The EU has never ventured into such areas: that in the future EU states will be able to massively subsidize companies that want to manufacture chips of the latest generation in Europe. The only condition: you must primarily serve the European market.
The USA, China and South Korea have launched similar programs. “Europe can no longer stand aside in this strategic competition,” said Industry Commissioner Thierry Breton. The message is clear: Europe will not let this train pass.
painful memories
The Frenchman pushed through his ideas of industrial policy in conjunction with the German Commission President – against Competition Commissioner Vestager. This actually thinks little of state planned economy in the high-tech sector. However, the majority of the members of the EU Commission probably still had in mind the painful experience when ventilators “Made in Europe” were in short supply at the beginning of the pandemic.
But experts like Nicolas Poitiers agree with the Competition Commissioner. Such a huge funding program favors the wrong people, says the economist at the liberal think tank Bruegel. Only large international corporations would have the means to submit appropriate funding applications. And only large, economically strong countries could even grant such tax breaks.
Smaller companies and the majority of small EU countries got nothing, according to Poitiers: “Large countries like France and Germany are buying into this high-tech industry, even though they have location advantages anyway.”
The attempt failed once
It would be all the more important to get transparency about what promises chip manufacturers are being lured with. But that will hardly be possible, because the microchip support program is partially exempt from EU competition rules.
A look at the past should make you skeptical: Nine years ago, the EU launched a funding program with comparable goals for the chip industry. It has not been able to prevent Europe from being more dependent than ever – on production capacities in Asia.