Chips: the West does not want a repeat of the pandemic

Author: Konrad Potocki
Chips: the West does not want a repeat of the pandemic

Europe and the United States have been making intensive efforts in recent months to become independent of microprocessor production in the Far East. This is because, until now, global chip production has been concentrated in Taiwan, South Korea, and China.

As a result of the pandemic and the disruption of supply chains, Western countries were forced to reduce industrial production because there was a shortage of processors used, for example, in the manufacture of trucks. Today, the European Union is finalising the European Chips Act, and US Intel is undertaking further giant investments in Germany and Poland. 

What does the European Chips Pact provide for? The initial agreement between the European Parliament, the European Commission, and the Council of the European Union envisages a doubling of semiconductor production by member states by 2030. Currently, the EU’s share of the global microprocessor market is 10%. The preliminary assumptions of the European Chips Act assume public-private investment of €43 billion, including some EU funds, not only for developing production but also for research work. Germany remains the European semiconductor leader with exports of EUR 28 billion, while the Netherlands and France are also significant producers.

Germany’s share in the production of microprocessors is about to increase further, due to Intel’s planned investment in Magdeburg. The American giant is investing close to EUR 33 billion in a factory for so-called silicon wafers, for which it will also open a plant near Wrocław in Poland. As Intel CEO Pat Gelsinger argues, Intel supports the European Union’s goal of regaining 20% of global semiconductor production capacity by 2030 and is investing in a global semiconductor supply chain that is resilient and geographically balanced. US corporations are steadily increasing their chip market share, and the US government has passed the Chips and Science Act, Europe’s corresponding European Chips Act.