The European Chips Law will fail. The European Court of Accounts believes that it is very unlikely to succeed

On February 8, 2022 Ursula von der Leyen, the president of the European Commission, announced that the old continent wants to be a fundamental actor in The semiconductor industryand the first step to achieve it requires manufacturing 20% of the planet chips in 2030. The CHIPS ACT Directive mobilizes up to 43,000 million euros between public and private investment to make it possible, and the still little tangible Integrated circuit plants that Intel and TSMC have programmed on German soil are two key pieces on this itinerary.

Despite its similarities, the US plan paints better than that of Europe. The country led by Donald Trump has an integrated circuit manufacturing infrastructure more solid than that of the old continent. In addition, Intel, TSMCSamsung, Texas Instruments and Globalfoundries are some of the companies that are already putting new avant -garde plants on American soil. And the US government seems to be determined to invest all the money that is needed to achieve the leadership position to which it aspires.

The Court of Accounts report gives Europe a reality bathroom

Europe needs to be ambitious if it wants to increase its relevance in the semiconductor industry. Have Asml and Intel facilities, Globalfoundries, and presumably in the future also of TSMC, within its borders he plays in his favor. However, the speech of European leaders, among which are Ursula von der Leyen, the president of the European Commission, and Thierry Breton, the European Commissioner of Internal Market and Services, seems to be focused on the quantity, and is not enough. The quality understood as the capacity of a chip to deliver added value is also fundamental.

The automotive and appliance industry are two of those that are essentially nourished by relatively simple integrated circuits, and it is important that Europe produces them. However, it is also essential that In European soil, avant -garde chips are manufactured such as those that require, for example, data centers and research centers artificial intelligence (AI). Otherwise Europe will continue to depend on the plants located abroad to be competitive in this strategic ecosystem.

As we have anticipated in the holder of this article, the European Court of Accounts, which is nothing other than “the financial guardian” of the European Union, has published A very thorough report in which he argues that the objective of achieving a 20% share in the world market of integrated circuits in 2030 seems unattainable. And this means that “it is very unlikely that the European Union achieves its objective.” At the current situation, as we have verified in the first paragraphs of this article, this conclusion is perfectly credible.

The Court of Auditors points out some interesting ideas in which we are being briefly stopped. Annemie Turtelboom, the head of this audit, He maintains that “The European Union needs a dose of reality in its strategy for the microchips sector (…) This is a field that changes rapidly, is characterized by its intense geopolitical competence, and currently We are far from the necessary rhythm To fulfill our ambitions. The 20% objective was basically an aspiration. To achieve this, our production capacity would have to be four times higher in 2030 and we are far from achieving those figures at the current speed. “

However, the production capacity they currently have and will have chips manufacturers established in Europe in Europe is not the only problem. The Court of Accounts points something that is important that we do not overlook: access to raw materials that are necessary to produce semiconductors, such as Rare earths; The cost of energy and geopolitical tensions further hinder the European Union plan. And, of course, the Chinese chips industry, Taiwan, Japan, South Korea and the US will not stop their growth, so these countries will not easily give market share. We will see what happens during the next five years, but objectively the panorama does not paint well for Europe.

Image | TSMC

More information | European Court of Accounts

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