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Using pandemic recovery funds, Europe moves to build up its semiconductor industry

Half the countries in the European Union, including Germany and France, are joining forces to develop semiconductors for use in self-driving cars, data centers, A.I. and supercomputers.

Europe already has a sizeable semiconductor industry with particular strengths in areas such as smartcards and sensors, but it’s still small compared with those in the U.S., South Korea and Taiwan—European companies hold just a tenth of the $530 billion global semiconductor market.

So, in a joint declaration issued Monday, the EU countries said they would set up an industrial alliance to rectify the situation.

Semiconductors are used in everything from cars and smartphones to medical devices and environmental sensors. In their joint statement, the countries warned the components “determine the characteristics of the products into which they are embedded—including security, privacy, energy-performance and safety—shaping how Europe’s green and digital transition will unfold.”

This isn’t the first time the EU’s big countries have pushed for greater tech independence in recent years—Germany and France are also developing a European cloud network.

But Europe’s growing push for “digital sovereignty” isn’t the only issue here—the coronavirus pandemic and current geopolitical tensions have also highlighted the dangers of having to import crucial items. And the EU relies on other parts of the world for most of its data-processing and electronic-communications chips.

“Europe has all it takes to diversify and reduce critical dependencies, while remaining open,” said Thierry Breton, the EU’s internal market commissioner. “We will therefore need to set ambitious plans, from design of chips to advanced manufacturing progressing towards 2nm nodes, with the aim of differentiating and leading on our most important value chains.”

The money for this joint initiative will partly come from EU and national pandemic recovery funds, a fifth of which are supposed to go towards the continent’s digital transition.

“This opportunity to invest in research, design and production capability for processors in Europe should not be missed,” the joint declaration read.

It set a target of 2025 for boosting the EU’s semiconductor production capabilities and developing faster, more energy-efficient processor chips.

All of the EU’s 27 member states are being invited to sign the joint declaration, but for now the signatories include Germany, France, Greece, Belgium, Estonia, Spain, Italy, Croatia, the Netherlands, Malta, Portugal, Slovenia, Finland and Romania.

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