EU May Ease State-Aid Rules For Funding New Chip Plants

The European Union may ease state-aid rules to allow the funding of new chip plants to tackle shortages in the bloc, its competition chief said on Thursday, while resisting pressure led by France for a no-holds-barred approach to subsidies, reported Reuters.

Due to its reliance on Asian chips, the EU has been particularly hard hit by an unprecedented global shortage in semiconductors that is holding up the delivery of goods from cars to Playstations and driving up smartphone prices worldwide.

The European Commission may approve state aid to fill funding gaps, in particular if it helps set up cutting edge chip plants, Margrethe Vestager told a news conference.

“Each case for the supply of semiconductors will be rigorously assessed based on their respective merits, so as to ensure that a project has a European nature and of course avoid a subsidy race within the union and beyond,” Vestager noted.

The U.S. last year announced its CHIPS for America Act aimed at boosting its ability to compete with Chinese technology while the EU – seeking to double the bloc’s share of global chip output to 20% over the next decade – plans to adopt its own chips act in 2022.

The Commission, which oversees antitrust policy in the 27 EU countries, would seek to ensure such support was subject to strong competition safeguards though and that the benefits were shared widely and without discrimination across the European economy, she added.

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