EU’s Digital Compass Plan aims at doubling chip manufacturing by 2030

According to the latest news, as per reports, by 2030, the EU (European Union) wants to increase its chip manufacturing output two folds to 20 percent of the global market. This goal is part of the EU’s new Digital Compass plan which was announced yesterday. The new Digital Compass Plan aims to fund various high tech initiatives in order to boost “digital sovereignty”.

Apart from increasing chip manufacturing two folds, within 2030, the EU also wants all households to have 5G access and gigabit internet connectivity so that “all key public services” are available online to any member of the state. The funding of these projects will come from the EU’s €672.5 billion ($800 billion) coronavirus response fund. The EU has earmarked 20 percent of this coronavirus response fund ($160 billion) for tech investment.

The EU’s goal of producing more semiconductor chips is noteworthy because for nations around the world, maintaining a steady supply of these chips has become a matter of concern lately due to the coronavirus pandemic and the US – China trade war. As of now, bulk production is concentrated in some Asian countries like Taiwan and Korea.

Last month, Joe Biden signed an executive order to investigate how the US can support its own chip manufacturing industry. Biden at a press conference “This is about making sure the United States can meet every challenge we face in this new era of pandemics, but also in defense cyber security, climate change, and so much more.”

The Wall Street Journal reported that at the launch of the Digital Compass plans, Margrethe Vestager, vice president of the European Commission said, “We need to become less dependent on others when it comes to key technologies.”

Manufacturing semiconductors is an extremely expensive business so building up the EU’s chip production is going to be a difficult task. In general, European companies are known for making the machines used in this process rather than the chips.

Dan Wang, a technology analyst at Gavekal Dragonomics has told the WSJ, “As China has shown, throwing money at chips does not guarantee success. For the last few decades, Europe has seen its number of semiconductor companies shrink, and it will require a mighty effort to wrest leadership from the US and Asia, which are also investing heavily.”