EU could invest heavily in production of semiconductors

The EU could see a major funding boost to promote semiconductor manufacturing in Europe.

What you need to know

• The EU is ready to commit 'significant' funds to battle the semiconductor shortage.
• Thierry Breton, the EU's commissioner for internal markets, discussed potential plans last Thursday.
• The EU's ultimate goal is to double its share of global semiconductor production to 20% and to produce 2-nanometer chips by 2030.

The EU seems set to follow in the footsteps of the U.S., China, and South Korea when it comes to combatting the global semiconductor shortage. Thierry Breton, the EU's commissioner for internal markets, discussed goals and plans in a meeting at the headquarters of ASML, an industry equipment supplier, last Thursday (via Reuters).

The EU's ultimate goal is to double its share of global semiconductor production to 20% and to make 2-nanometer chips by 2030. Before it does that, Breton says that it needs to expand its capacity to build mid-level chips.

An upcoming "alliance" of European semiconductor companies was reported by Reuters in April. The alliance is said to include ASML, Infineon, STM, and NXP.

Breton highlights that this alliance between semiconductor companies is similar to what's occurred in the US., China, and South Korea. He also explained that the EU hopes either Samsung, Intel, or Taiwan Semiconductor will build a plant in Europe.

Funding from the EU could come from the 800 billion euro (roughly $976.5 million) coronavirus recovery fund. 20% of that fund is intended to go towards "digital transition" within the EU.

Several factors contributed to the global semiconductor shortage, including the current global pandemic and a spike in interest in certain electronics. As a result of the shortage, the best graphics cards and consoles like the Xbox Series X are in short supply. The shortage also affects other industries, such as the automotive industry.