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Daily Tribune
29-04-2025
- Business
- Daily Tribune
EU ‘off the pace' in global microchip race: auditors
The EU is lagging behind in the global race to produce microchips, and looks set to fall well short of its target to claim a fifth of the world's market, the bloc's auditors said Monday. 'The EU urgently needs a reality check in its strategy for the microchips sector,' said Annemie Turtelboom, a member of the European Court of Auditors. 'This is a fast-moving field, with intense geopolitical competition, and we are currently far off the pace needed to meet our ambitions.' The disappointing outlook for the European Union comes despite Brussels passing a flagship Chips Act in 2023 aimed at bolstering production in the bloc. Turtelboom said that at current growth rates, the EU was 'nowhere close' to reaching its target of having a 20% share of the global microchip market by 2030.
Euronews
29-04-2025
- Business
- Euronews
EU needs 'reality check' on flawed microchip strategy: report
ADVERTISEMENT The EU should take a "reality check" on a microchip strategy setting targets of 20% global market share by 2030, which it is unlikely to meet despite investment in the sector, according to a report published by the European Court of Auditors (ECA) on Monday. The report acknowledged that the EU Chips Act – which entered into force in 2023 and came as a response to the global supply chain disruptions caused by the COVID-19 pandemic – has brought new momentum to the bloc's microchip sector, but found investments driven by the Act are 'unlikely to significantly enhance' the EU's position in the field. The ECA recommends the Commission assess whether the Chips Act's ambitions and targets remain realistic in view of the resources available to achieve them, global competition, as well as factors such as energy cost and dependence on raw materials. The Commission should start preparing a fresh semiconductor strategy in cooperation with member states and industry, the ECA report adds. The EU executive has a legal obligation to evaluate the Chips Act by September next year. Related Semiconductors: Brussels wants to plough billions into making more microchips in the EU EU Chips Act: Leaders strike €43 billion deal to boost semiconductor production in Europe The EU set a target for the bloc to gain 20% share of global production value in cutting-edge microchips – used for everything from cars to smartphones and data centres – by 2030. In 2020 the EU's share was estimated at around 9%. The Commission itself forecast last year that the EU's overall share of the global value chain would increase only slightly, from 9.8% in 2022 to just 11.7% by 2030, despite expected increases in manufacturing capacity. The EU executive is responsible for only 5% (€4.5 billion) of the €86 billion in estimated funding for the Chips Act up to 2030, with the remainder expected to come from member states and industry. By comparison, the top global manufacturers budgeted €405 billion in investment for the 2020 to 2023 period, which dwarfs the financial firepower of the Chips Act. 'The EU urgently needs a reality check in its strategy for the microchips sector,' said Annemie Turtelboom, the ECA member in charge of the audit. 'This is a fast-moving field, with intense geopolitical competition, and we are currently far off the pace needed to meet our ambitions,' Turtelboom added. The Commission's spokesperson Thomas Regnier said in a reply that the EU executive "takes note" of the report. He added that the Chips Act has "laid a strong foundation in consolidating Europe's position in the global semiconductor market after two decades of decline, and put Europe back on the path of growth."
The Guardian
28-04-2025
- Automotive
- The Guardian
EU microchip strategy ‘deeply disconnected from reality' say official auditors
The EU's strategy to secure its own supply of microchips is 'deeply disconnected from reality', a damning report by the official European court of auditors (ECA) has found. The ECA found the bloc was 'very unlikely' to meet its target of supplying 20% of the world's microchips at a time when global demand for semiconductors is booming to meet the growing needs of defence, green tech and artificial intelligence. With Donald Trump threatening to impose tariffs on chips imported to the US, there is also potential for 'collapse of supply chains', the ECA said, making the EU more vulnerable, despite tech multinationals such as California's Intel and South Korea's Samsung having bases in Europe. 'The EU urgently needs a reality check in its strategy for the microchips sector,' said Annemie Turtelboom, who was in charge of the ECA audit. A European Commission paper in 2022 set out the bloc's ambition to take a 20% share of the chip market, a share reflecting the percentage of global end users located in Europe. However, the ECA's report found that target was 'essentially aspirational' with investment goals hindered by the bloc's 'financial muscle' being too fragmented across different schemes and tax regimes. 'We are making promises that are deeply disconnected from reality,' Turtelboom told reporters at the launch of the report. 'We are competing in a global race, but from the back of the field, and it is unclear whether we have the means to be successful in this race[or the] competencies to support the industry, and the funding we have available is fragmented and scattered.' Microchip shortages can cause huge problems for industry. The report noted that in the pandemic's wake, a lack of microchips for German carmakers caused production to collapse to 1975 levels. 'They are present in everything, and are becoming only more so with time,' Turtelboom said. 'In a modern car, there are around 1,500 microchips. By 2030, this number is expected to rise to 3,000.' Brussels announced a Chips Act in 2022 to reduce the EU's reliance on foreign states for supplies of critical components. The resulting regulation came into force in 2023. 'Is it worrying? We know that other continents, China, the US, Taiwan and South Korea, they are not sitting still,' Turtelboom added. China is expected to overtake Taiwan as the world's biggest manufacturer of chips in 2030 with 22% of the market, according to the ECA. The EU is forecast to to manufacture just 8% on its own soil by then, and would have to quadruple its production capacity to meet a 20% target. The ECA found that the Chips Act did provide 'new impetus' to manufacturing, and that the funding provided by the European Commission was aligned to the bloc's strategy. Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion However, it said that the Act was 'prepared in urgency' and the Commission had no mandate to coordinate national investments and all funding streams. It added that tax breaks needed to be closely monitored with a view to increasing investment. The EU's ambition when the Chips Act came into force was to mobilise €86bn (£73bn) in investment by 2030, but this is eclipsed by the sums being spent by the likes of Taiwan Semiconductor Manufacturing Company (TSMC), Samsung and Intel. These top players budgeted $425bn (£361) for investment in just three years between 2020 and 2023 and only one, TSMC, had significant plans to invest in the EU. Intel, which already has manufacturing facilities in Ireland, had planned to pour €30bn into a mega plant in Magdeburg, Germany, with backing of almost €10bn from the German government, but postponed construction last September. The postponement was a major blow to the EU that highlighted the effects of the sector being concentrated in so few hands. 'There are a limited amount of players who receive a lot of funding, which means if one project drops, it has a huge impact on the 20% targets,' Turtleboom said. A European Commission spokesperson said the Chips Act had catalysed funding of €80bn and 'laid a strong foundation in consolidating Europe's position in the global semiconductor market after two decades of decline, and put Europe back on the path of growth'.
