Through the European Chips Act, the European Commission hopes to make 42 billion euros available to increase chip production in Europe. There are doubts about the money’s origin. Anonymous sources informed Bloomberg that European member states would receive less financial support to finance the Chips Act.
On February 8, the European Commission will present the European Chips Act. The proposal is meant to double chip production in Europe by 2023. The goal is clear, but the method raises questions.
We know that the Chips Act will free up over 42 billion euros in funding to boost chip production. This was confirmed by Ursula von der Leyen ( President of the European Commission) on Thursday, February 3. According to von der Leyen, 12 billion is sponsored by the public and private sectors. The other 32 billion comes from European assets. Though Brussels says there’s no need to make cuts, new sources question the funding’s origin.
Anonymous sources told Bloomberg that the Chip Act depends on budgets currently used to fund other projects and support member states. The individuals requested anonymity to avoid being identified as a source of private information.
Contrary to the sources, several European policymakers are convinced that existing budgets do not need to be used. They, too, argue that there’s no need to cut funding elsewhere.
Leaked Chips Act draft
Bloomberg claims to have seen a first draft of the Chips Act. According to Bloomberg, the draft states that the Chips Act will allow European governments to finance chip production with state funds. Currently, a member state can only offer European state aid for research or the first production of a new design. According to Bloomberg’s document, governments will be enabled to finance long-term chip production.
This would mean that member states are free to sponsor the operations of organizations such as Intel and TSMC. For this purpose, member states would receive a portion of the 32 billion euros announced by Ursula von der Leyen.
Merely a proposal
Only on February 8 will we know for sure what the European Chips Act proposes. That is when the European Commission presents the plan. Afterwards, the European member states and the parliament vote on the draft. Chances are that the draft will be repeatedly adjusted to achieve their support.
Tip: Where is the billion-dollar investment that Intel promised Europe?
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