By Foo Yun Chee and Sabine Siebold
BRUSSELS (Reuters) – EU countries will find it easier to provide funding for first-of-a-kind factories under a European Commission billion-euro plan set out on Tuesday aimed at boosting its chip industry and cutting the bloc’s dependence on U.S. and Asian companies.
The move by the European Union executive mirrors the $52 billion U.S. Chips Act aimed at increasing competitiveness with China and comes as a global chip shortage and supply chain bottlenecks create havoc for car makers, healthcare providers, telecoms operators and others.
The European Chips Act will “enable 15 billion euros ($17 billion) in additional public and private investment by 2030”, Commission President Ursula von der Leyen said in a statement to the media.
“This will come on top of 30 billion euros of public investments already planned from NextGenerationEU, Horizon Europe and national budgets. And these funds are set to be matched by further long-term private investments,” she said, referring to ongoing EU projects.
Von der Leyen said the bloc will ease its state aid rules, which aim to prevent illegal and unfair subsidies granted by EU countries to companies, for innovative chip factories.
“We are, therefore, adapting our state aid rules, under strict conditions. This will allow – for the first time – public support for European ‘first-of-a-kind’ production facilities, which benefit all of Europe.”
The chip push comes as EU countries woo U.S. chipmaker Intel, which has yet to announce where it will locate a European mega-fab plant, triggering concerns of a subsidy race.
Intel welcomed the EU chip push, urging authorities on both sides of the Atlantic to join forces.
“We are currently considering a significant increase in our European footprint, and we expect that the EU Chips Act will facilitate these plans,” the company said in a statement.
($1 = 0.8763 euros)
(Reporting by Sabine Siebold and Foo Yun Chee, additional reporting by Supantha Mukherjee in Stockholm; Editing by John Chalmers)
