An insider source told Bloomberg that the member states of the European Union have reached an agreement on the Chips Act.

The Chips Act was proposed by the European Commission in February 2022. Brussels wants 20 percent of all chips worldwide to be produced in the European Union by 2030. The Chips Act is a means to achieve that goal. The plan provides subsidies and allows governments to invest in chip manufacturers.

The plan has yet to be approved, but some measures are already in place. For example, in the event of a chip shortage, member states can call on the European Commission for support. Other measures, such as the option for governments to invest in chip manufacturers, won’t take effect until an official agreement has been reached.

An insider source told Bloomberg that the agreement recently came closer. According to Bloomberg, the source claims that the member states of the European Union have agreed on a modified version of the plan. The source expects the new version to be signed at a meeting in December.

This does not mean that the Chips Act will take effect in December. Upon its announcement, the plan must be publicly approved by the European Commission, the European Council and the European Parliament. Only then can the Chips Act come into force.

Change

According to Bloomberg’s source, the new version differs from the original plan in several ways. The Chips Act makes billions of euros in subsidies available to manufacturers and researchers. The original plan proposes to finance some of the subsidies by taking €400 million from existing chip research grants — in the new version, these grants are left alone.

The change was made in response to criticism from member states with smaller chip industries. The Chips Act’s subsidies mainly benefit member states with large chip industries. Countries with the most researchers and manufacturers receive most of the subsidies. Removing existing grants to fund the Chips Act puts member states with smaller chip industries at a disadvantage. Hence, according to the source, the plan was modified.

At this time, no one knows exactly when the Chips Act will come into force. We expect an update in the coming weeks.

Tip: MEPs warn that the EU is running out of money to fuel its chips race