The EU chips act: Securing Europe’s supply of semiconductors [EU Legislation in Progress]

Written by Guillaume Ragonnaud (3rd edition, updated on 26.06.2023).

Semiconductors (or chips) are the foundation of the digital transition. Their production relies on complex and vulnerable global supply chains. Against the backdrop of global chip shortages, a global ‘subsidy race’ in the world’s main producing regions, and the renewed EU industrial policy, the Commission presented a proposal for an EU chips act aimed at reinforcing the whole EU chips value chain in February 2022.

The proposal for a chips act was based on a three-pillar structure, which has been retained by the co-legislators: pillar 1 to bolster large-scale technological capacity building and innovation in the EU chips ecosystem; pillar 2 to improve the EU’s security of supply; and pillar 3 to set up a monitoring and crisis response mechanism. In the event of supply crises, the Commission would be allowed to implement three types of emergency measure: asking companies for information, asking companies to accept and prioritise orders of crisis-relevant products, and making shared purchases on behalf of Member States.

Following provisional political agreement reached between the co-legislators on 18 April 2023, 14 months after the publication of the Commission proposal, and after four trilogues.

Versions

• June 2023: The EU chips act: Securing Europe’s supply of semiconductors (3rd edition)