EU plans $6.45B investment to boost chip manufacturing

Arguing that "Europe cannot be left behind" in chip investments, the EU Commission plans to double chip production to take a one-fifth slice of the global production pie.

The European Commission said on Thursday it has launched a campaign to boost chip manufacturing efforts in the region.

In a press note published by the EU executive body, the New European Industrial Strategy for Electronics will help mobilize €100 billion ($129bn) in new private investments through 2020, including €5 billion ($6.45bn) through a joint public-private partnership to support chip manufacturing.

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The logic behind the move is that the electronics sector "underpins Europe's wider industrial competitiveness [...] for other sectors, from energy to automotive to health."

EU Digital Agenda Commissioner Neelie Kroes said in prepared remarks that she wants to "double" chip production to take a 20 percent slice of the global production. "I want Europe to produce more chips in Europe than the United States produces domestically," she added. "It's a realistic goal if we channel our investments properly."

The move comes just months after GlobalFoundaries chief executive Ajit Manocha told attendees at an event in San Francisco, California that the EU should "support" chip-making efforts on the continent.

The new strategy will focus on three complementary areas: making chips cheaper by transitioning to 450mm-sized silicon wafers; making chips faster, and making chips smarter.

The seven-year partnership, the EU says, will include funding for large-scale innovation projects under the EU's Horizon 2020 research program, which was agreed upon by the electronics industry last year.

Europe currently employs around 200,000 people directly, and supports around one million indirectly. Unmet demand for skilled workers was another cited reason for the push to further develop the EU's chip-making base.

In recent years, the EU has been in a love-hate relationship with chip makers. 

Just recently in April, the EU sent a formal statement of antitrust charges against unnamed makers of smart card chips , citing "cartel" behavior — such as price-fixing — in the region. Earlier in the year, the EU said it had conducted raids on Infineon Technologies, STMicroelectronics, Atmel Corp., Renesas Technology, and former Philips division NXP.

Intel was also fined €1.06 billion ($1.4bn) by EU authorities. The chip maker was accused of anti-competitive behavior that ultimately harmed AMD. As a result, the rival chip manufacturer suffered delays and poor sales.