Europe Puts Its Chips Down

A forthcoming EU plan to subsidize semiconductor production may be more bark than bite.

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(Photograph from Getty Images.)

French President Charles de Gaulle reportedly sniffed at first sight of a transistor radio, a gift from the prime minister of Japan in 1962.

Today, European policymakers are taking semiconductors much more seriously.

The European Chips Act, proposed by the European Commission in February 2022 and still being negotiated, aims to double semiconductor production within the European Union by 2030, bringing about “a thriving semiconductor sector from research to production and a resilient supply chain.” It promises 43 billion euros in state subsidies—on par with the $53 billion allotted  for U.S. production by the CHIPS Act, which President Joe Biden signed into law last August—and a data-gathering program to allow member states to monitor and address shortages.

But some experts are skeptical about what the proposed legislation can really achieve.

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  1. Avatar photo
    MatthewRobin

    "
    Once upon a time, wrote the Brookings Institute’s Constanze Stelzenmüller, Europe “outsourced its security to the U.S., its export-led growth to China, and its energy needs to Russia.”
    "

    Sick burn

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  2. Avatar photo
    Ben Connelly

    ““The Commission seems to think governments can forecast the market better than the industry itself,” Kleinhans tells The Dispatch.”

    They can’t. The human race learns from experience, but it sure takes a lot of stubborn kicking ourselves in the crotch kind of mistakes first. Hayek famously said, “The curious task of economics is to demonstrate to man how little he knows about the things he imagines he can design.” Apparently, almost fifty years later, we still haven’t learned that.

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  3. Hartzlk

    High end chips - I think I remember Klon saying these were required for the production of certain weapons.
    I'm guessing other uses are for research at universities? Maybe specialty medical equipment? Are their other uses?

    Wasn't quite sure from the article - does the US's CHIPS act cover middle and low end chips as well, or is it primarily about the high end ones?

    Thanks for the detail, here!

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