EU'S CHIP PRODUCTION PLAN AIMS TO EASE DEPENDENCY ON ASIA

The European Union announced a $48 billion plan to become a major semiconductor producer, seeking to curb its dependency on Asian markets for the component that powers everything from cars to hospital ventilators and game consoles.

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At a time when natural gas shortages and Europe’s reliance on Russia for energy shows the political risks of economic dependency, the 27-nation bloc is moving to boost its economic independence in the critical semiconductor sector with its Chips Act.

“Chips are at the center of the global technological race. They are, of course, also the bedrock of our modern economies,” European Commission President Ursula von der Leyen said. The plan still needs the backing of the EU parliament and the member states.

The EU move mirrors U.S. President Joe Biden’s $52 billion push to invest in a national chip-producing sector to make sure more production occurs in the United States.

As the economy has bounced back from the COVID-19 pandemic over the past year, there has been a supply chain bottleneck for semiconductors. In Europe, some consumers have had to wait up to almost a year to get a car because of a lack of spare parts.