By Hendrik Bourgeois, Vice President of European Government Affairs at Intel
The US got off to an earlier start than the EU in its incentives policy for semiconductors, with the drafting of the US CHIPS Act in the spring 2020 that was finalized the first day of 2021. However, 16 months later, despite a sense of urgency among political leaders in Washington, the funding of the US CHIPS Act remains on the drafting table. The EU, meanwhile, took only five months to draft its counterpart, the EU Chips Act, which is now going through the legislative process and, in many respects, already applies.
The EU Chips Act also has tangible advantages over the US one. It favours leading-edge manufacturing, with spill-over benefits that will spur innovation across the value chain. The EU expedites permitting for the facilities it supports. This will ensure that state of the art facilities can be quickly built, even while meeting the rigorous EU sustainability and environmental objectives. In a dynamic and highly competitive industry like the chips sector, a delay of just a few months could impact a new project when the investor has another viable location that can meet its timing requirements.
There are also many similarities. The scale of funding on both sides of the Atlantic are roughly equivalent, and both pieces of legislation include provisions to address the critical skills shortage that exists both in the US and EU. The EU Chips Act delves into product related issues not addressed in the US CHIPS Act, such as managing supply disruptions, priority orders in emergencies, export controls and product certifications—all of these will be easier to implement if the US and EU can agree on standards and market-driven best practices.
These policy initiatives are of course not just about digital leadership. The EU can improve its failing industrial productivity in advanced manufacturing with better access to chips and, perhaps more importantly, the green transition the EU has embarked on needs advanced chips. Innovations that will be crucial for the green transition such as automated driving and high-performance computing are powered, at their core, by our most advanced chips.
The EU Chips Act and US CHIPS Act have very similar goals, but the detail and means of implementation for these initiatives vary significantly. Lawmakers on both sides of the Atlantic meeting this weekend in Paris should join forces to rebalance and create a more resilient chips supply chain. More details on how this can be achieved can be found in Intel’s policy brief here.