Brussels wants emergency powers to boss chipmakers around when semiconductor shortages start nobbling Europe’s supply chains.
According to the Financial Times, the EU is preparing sweeping powers to intervene in Europe’s semiconductor supply chains during shortages, including forcing chipmakers to ignore existing contracts.
A draft law would allow the bloc to run joint purchasing to boost its negotiating muscle. It would mark a clear expansion of Brussels’ power to meddle directly in industrial supply chains.
Tensions between Beijing and Washington have sharpened fears that semiconductors could become tools of economic coercion. Europe’s reliance on Taiwan for high-performance chips has made the worry rather less theoretical.
The risks became obvious last year when the Dutch government took control of chipmaker Nexperia from its Chinese owner. Officials were worried that production and assets were being shifted out of Europe. Chip flows from Nexperia’s China arm slowed sharply, forcing some European carmakers to cut production.
The draft law could still change before its expected publication next week. It would give the European Commission broad powers when chip shortages threaten weapons, medical devices, digital infrastructure and other critical goods.
In a crisis, the Commission could fine companies up to €300,000 for failing to provide requested details about supply-chain capacity. It could “force semiconductor manufacturers to prioritise orders for crisis-critical products, overriding existing contracts”, according to the draft.
Brussels could enable common purchasing to “strengthen negotiating power and prevent competition between EU countries for limited supplies”. The Commission would act as a central buyer for several EU countries, much as it did when buying vaccines during the pandemic.
This Chips Act is part of a wider push to reduce the bloc’s dependence on US technology. Brussels wants European alternatives in semiconductors, cloud computing and AI, because apparently waking up dependent on everyone else has become unfashionable.
In the document, Brussels admits the bloc is “almost entirely dependent on the US and Asia” for the most advanced chips. Semiconductor supply chains are huge and messy. A typical Nvidia system can tap thousands of suppliers across dozens of countries.
The EU makes less than 10 per cent of the world’s semiconductors. Earlier plans to double its global market share by 2030 are already behind schedule.
Like everyone else, the bloc depends heavily on Taiwan for high-performance chips. Taiwan, home to TSMC, accounts for more than 90 per cent of leading-edge chip manufacturing, leaving Europe exposed if geopolitics goes pear-shaped.
China has repeatedly threatened force against Taiwan if Taipei keeps resisting its sovereignty claims. Any conflict in the region could cause global shortages of parts needed for smartphones, AI data centres, cars, medical gear and the rest of the shiny kit modern life pretends is optional.
