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According to an official document seen by Reuters, several EU nations would like to subsidize manufacturers of existing chips rather than the first-of-their-kind chips suggested by the European Commission in the European Chips Act.

The European Chips Act, launched earlier this year, intends to strengthen the European Union’s chip sector and lessen its reliance on supplies from Asia and the US, which have been exacerbated by worldwide shortages and supply chain constraints. The EU executive stated that the €45 billion plan authorizes state investment only for European ‘first-of-a-kind’ manufacturing plants.

To become legislation, the plan must be agreed upon by EU nations and legislators. An official document seen by Reuters indicates that several EU nations want authorization to fund cutting-edge semiconductors used by automakers. The latter would require changes to the European Chips Act, which currently only allows state funding for first-of-a-kind manufacturing plants.

A solution that covers more chips

The Czech Republic, which now occupies the rotating presidency of the European Union, has proposed a solution that may apply to a larger spectrum of government-subsidized chips.

According to the document, the requirements for a one-of-a-kind facility could be expanded to include innovation to boost computing power, security, safety, dependability and sustainability.

In December, EU ambassadors may agree on a unified stance, allowing them to begin discussions with lawmakers to finalize the legislation.

European Chips Act

In February, the European Commission eased funding rules for innovative semiconductor plans to boost the chips industry and reduce dependence. The EU’s Chips Act paralleled the $52 billion US Chips Act, which was designed to increase competition with China.

Von der Leyen stated that the EU would relax its state aid laws for innovative chip manufacturing, allowing EU governments to subsidize chip manufacturers.

When questioned if the Commission was breaking state aid regulations, Vestager stated that funding approval would be based on a seldom used article in the EU treaties. Vestager added that subsidies had to be equitable, have a pan-European impact and not exceed what’s needed.