Dutch warn EU should stay coupled to the global chip supply chain

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Europe’s attempt at chipmaking independence would be a mistake, the Dutch government claims.

The Netherlands warned the EU this week that they should not decouple from the global semiconductor supply chain, according to reporting in Reuters. The EU’s move to decouple comes as the bloc tries to create a European chipmaking ecosystem and be self-sufficient.

Decoupling from the global supply chain would be a mistake, the Netherlands said in a paper published on the government website. To support this assertion, they point to the success of Dutch companies ASML, the world’s leading producer of advanced chipmaking tools, and chipmakers NXP and Besi.

Reliance on Asia has the EC worried

The EU relies on Asian-made chips and has a diminished share in the supply chain, from design to manufacturing capacity. However, global supply chains have been disrupted by the COVID-19 pandemic. This in turn has led governments around the world to consider bringing manufacturing operations closer to home.

The European Commission in September proposed a European Chips Act covering research and production capacity. This was in reaction to the chip shortage that has disrupted the auto industry, medical devices makers and telecoms providers.

The European Chips Act “requires acknowledgement that decoupling of the global semiconductor value chain is an illusion,” the paper said.

“European interests are best served by an open ecosystem that remains focused on attracting investment, accelerating innovation and adding market value,” the Dutch said. “Diversification and mutual interdependence promote resilience and prevent one-sided dependencies.”

Instead, the Dutch proposed that the EU create mechanisms to prevent unwanted strategic takeovers of key chipmakers.

Tip: Why the acquisition of ARM by Nvidia should be prohibited