Chip companies try to secure money from the European Chips Act

Chip companies try to secure money from the European Chips Act

Major European chipmakers specializing in photonic chip production are asking for about 4 billion euros in subsidies. Only in this way would Europe be able to compete with the chip offerings of Asia and America, a position that the EU is hugely keen on. Chipmakers in the region at least seem to believe in the EU’s ambitions and have already begun to invest.

According to chipmakers, Europe currently has an excellent position within photonic chip production. However, according to the companies, Europe must realize that they so far only created momentum which makes perseverance necessary. During PIC Summit Europe in Eindhoven, the Netherlands, executives from chip companies shared this vision with EU regulators. Among others speaking there were MEP Tom Berendsen, Erwin Nijsse, director general of Business and Innovation at the Dutch EZK and Werner Steinhoegl, director of Sector at the European Commission.

“Currently, the EU has a vibrant and growing integrated photonics industry, but without large-scale manufacturing, testing and packaging capacity, we are incredibly vulnerable to global events and the policies of competing countries,” said Johan Feenstra, CEO of Smart Photonics. Reuters reports.

He and other European chip companies proposed an eight-year plan to ensure production in our region. This calls for 4.25 billion euros in subsidy money. The EU can finance this through the now-enacted European Chips Act.

Also read: European Chips Act is now in force: what does it mean?

Smart investment?

Indeed, investing in photonic chip production does not seem to be a bad plan. The chips are a new avenue of chip production as physically shrinking chips becomes an increasingly difficult task. The difference in the production lies in the use of light particles instead of electrons for the mathematical power of the chips.

Some advantages of the finished product are higher speed and lower power consumption. The automotive industry and data centers are very interested in this new way of chip production mainly because of the reduced consumption. Photonic chips may additionally be a breakthrough for scaling up quantum computing.

Photonic chips from the Netherlands

Smart Photonics is a Dutch-based company which already received some governmental aid in the past. The Dutch government, ASML, NXP and VDL invested one hundred million euros in Smart Photonics earlier this year, the company whose CEO was thus now speaking at the event in Eindhoven.

The company is important for the Netherlands, as the country is a leader in the development of photonic chips. Especially with the European Chips Act enabling European subsidies for production, that position is interesting to maintain for the country. ASML, NXP and VDL also stated as the reason for the investment that they want to contribute to strengthening the tech sector in the Eindhoven region.

Read also: The Netherlands gives NXP, ASML and Nearfield 230 million euro

Faith in European ambitions

However, the European Chips Act was set up to encourage chip production in the whole European region. Companies with a presence in the region at least seem to believe in EU ambitions for their own chip production. This translates into investments and new production sites. In Germany, for example, there are plans to open the European Semiconductor Manufacturing Company (ESMC). That company is led by TSMC, which is bringing its manufacturing process to Europe for the first time.

Bosch, Infineon and Dutch NXP recently received approval from Germany’s competition watchdog to invest in this company. As a result, the three companies all acquire 10 percent of the shares.