Brussels (Brussels Morning) European Commissioner EC for Competition Margrethe Vestager announced on Thursday that the EC is considering easing its rules on state aid to order to allow chip plant funding.
Due to its heavy reliance on imports from Asia, the bloc has been hit hard by the global shortage of chips. This is why the EC is now looking to introduce more lenient rules for financing chip plants, Reuters reports.
Vestager pointed out that the EC is thinking about approving state aid to help with the launch of modern semiconductor plants.
The EC wants tight control over such support, she indicated, stressing that it must not undermine competition and that its benefits have to be shared across the EU without discrimination.
“Each case for the supply of semiconductors will be rigorously assessed based on its respective merits, so as to ensure that a project has a European nature and of course avoid a subsidy race within the Union and beyond,” she noted.
EU follows US’ example
Next year, the EU plans to adopt regulations similar to those the US has introduced in order to increase its output of semiconductors and compete with Asian manufacturers.
US tech company Intel announced it could invest up to 80 billion euro in Europe in the next ten years or so, with France and Germany the main candidates for factory sites.
According to the US management consulting firm Kearney, setting up a large semiconductor factory in the EU could increase GDP between 77 and 85 billion euro over one decade, roughly two times more than the investment needed to launch it.
France and Germany maintain that the EU’s antitrust rules should not prevent the creation of giant set ups capable of competing with global leaders, especially from China. They pointed out that in the past regulators have blocked large mergers, citing the German Siemens conglomerate’s planned takeover of French rolling stock manufacturer Alstom in 2019 as an example.