EU plans to invest more than 43 billion euros to support local supply chains

EU member states agreed to invest more than 43 billion euros in the development of the chip industry, aiming to support the local chip supply chain and reduce the burden on American and Asian manufacturers.

The Czech Republic, which holds the rotating presidency of the EU, said that the EU envoy unanimously supported the revised version of the European Commission's proposal. EU ministers will meet on Dec. 1 to approve the chip plan, though it still needs to be discussed with the European Parliament next year before it can become law.

The bloc's executive branch, which hopes state subsidies will help the bloc gain 20% of global chip production capacity by 2030, has made its proposals after a global chip shortage and supply chain bottlenecks hit carmakers, healthcare providers and telecom operators share. Europe's current share of chip production is 8%, down from 24% in 2000.

The envoys agreed to changes to the committee's proposal, including allowing the state to subsidize a wider range of chips, not just the most advanced ones. The subsidy will cover chips that lead to innovations in computing power, energy efficiency, environmental benefits, and artificial intelligence.

EU countries have also sought to limit the powers of the European Commission, saying its requests for information from companies during the crisis must be proportionate and focus on safety, according to an EU document seen by Reuters.

EU lawmakers still face the task of negotiating to fund for the project, the document said.

The European Commission has earmarked unspent funds for research programs and other initiatives, drawing criticism from some EU countries that it could unfairly favor countries that already have chip facilities or are poised to attract chipmakers.

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