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The EU wants to boost its chip production as Covid fuels a global supply shortage

Executive Vice President of the European Commission for an Europe Fit for the Digital Age Margrethe Vestager.

YVES HERMAN | AFP | Getty Images

LONDON — The European Union has plans to become less reliant on technologies traditionally manufactured outside of the bloc, such as the ramping up of chip production.

Semiconductors are used in almost all electronic devices, from laptops and mobile phones to the brake sensors in our cars. However, the EU represents less than 10% of the global production of these chips.

Amid a global shortage of semiconductors, as well as tensions between China and the U.S., the bloc believes it is time to improve its digital sovereignty.

“It is our proposed level of ambition that by 2030 the production of cutting-edge and sustainable semiconductors in Europe including processors is at least 20% of world production in value,” the European Commission said in a document to lawmakers on Tuesday.

This is particularly important for the EU at a moment when many manufacturers are facing delays and additional costs as they struggle to get enough semiconductors to make new cars. The coronavirus pandemic has exacerbated the demand for digital devices and is putting a strain on chip supply.

Digital champions

In addition, European officials also want to dent some of the dominance that Chinese and American companies enjoy in this tech space. The largest chip manufacturers are either U.S. or China based.

The biggest social media platforms are also either American or Chinese. In fact, the EU has always lagged in terms of hosting digital champions.

“In the face of growing tensions between the United States and China, Europe will not be a mere bystander, let alone a battleground. It is time to take our destiny into our own hands,” Thierry Breton, European commissioner for the internal market, said in July last year.

“This also means identifying and investing in the digital technologies that will underpin our sovereignty and our industrial future,” he added at the time.

Europe’s latest efforts to claim digital sovereignty are not new. The strategy has been discussed for a few years now as concerns grew over the safety of the data of European citizens. However, a new team in Brussels, in place since Dec. 2019, has been focused on pushing member states from talks to action.

As a result, the plans outlined on Tuesday also proposed that “all European households will be covered by a Gigabit network, with all populated areas covered by 5G.”

“The pandemic has exposed how crucial digital technologies and skills are to work, study and engage, and where we need to get better. We must now make this Europe’s Digital Decade,” European Commission President Ursula von der Leyen said in a statement.

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