On 19 October 2021, the EU Commission published its 2022 Work Programme (the “Programme“), which sets out the key goals that the EU Commission hopes to achieve in 2022. Chief amongst these is a desire to make “A Europe Fit for the Digital Age”, with a key proposal to achieve this being a possible “European Chips Act”. In the Programme, the EU Commission has stated that it will publish a proposal for a European Chips Act (the “Act”) in the first half of 2022.
The Act is known as the “European Chips Act” as the aim of the Act is to secure Europe’s supply of microchips and encourage innovation, in response to the challenges faced in some sectors due to a “high dependency on a very limited number of non-EU suppliers…particularly apparent when it comes to semi-conductors.” Production of chips has slowed due to the pandemic, and the scarcity of chips is an increasing concern for EU industry. Due to these challenges, the EU Commission said that the Act will be introduced to “promote a state-of-the-art European chip ecosystem to boost our innovative capacity, security of supply and develop new markets for ground-breaking European tech”.
The Act builds on the European Alliance on Processors and Semiconductor Technologies which was launched in July 2021 and aims to “identify current gaps in the production of microchips and the technology developments needed for companies to thrive, no matter their size.”
In terms of regulatory takeaways for clients, it is telling that the EU Commission has noted “security of supply” of chips. We could therefore see a scenario, as with the COVID vaccines, where the EU prohibits the export of certain types of chips in the future in order to protect supplies in the EU. On the other hand, there may also be opportunities for businesses to capitalise on the EU’s desire to become a chip manufacturing hub, with opportunities for investment and trade opening up.