EU Chips Act heading for failure, time for Chips Act 2.0 The European Chips Act is unlikely to meet its target of hitting a 20 percent share of the global semiconductor market by 2030. This is according to special report by the European Court of Auditors (ECA), which cast its eye over the project that aims to inject new vigour into the chip industry across the region, and details a …
Dear Mr Shepilov
It has come to our attention that, in your haste to meet your quotas, you often repeat yourself. Our agency takes great pride in the research it does on the internet and this putting our reputation at risk. This is making us, and Herren Trump & Putin, look bad. You are hereby formally requested to post more substantial articles in the future.
The saving grace here is using our Talking Point #23 - Rumours of resignations.
Yours, Ilya Abramovich
ref:
https://forums.theregister.com/forum/all/2025/04/03/eu_backdoor_encryption/
https://forums.theregister.com/forum/all/2025/02/03/intel_eu_antitrust_payout/
https://forums.theregister.com/forum/all/2024/12/05/arianespace_vega_c_delay/
https://forums.theregister.com/forum/all/2024/12/04/arianespace_vega_c_launch/
When the whole EU grand chip scheme was announced many commenters here noted that it was likely to be doomed to failure. The budget is relatively small and the ambitions quite delusional. With the great white hope Intel putting a lot of it's expansion on hold, including the EU, this report was never going to be a gold star review.
Politicians set them so they can forget about stuff. The higher the target the more impressive it looks when you set it. You won't be in power when your successors fail to meet it. And they will, as nationalist projects like this always fail. I mean, the EU becoming more resilient by giving money to Intel? Spot the flaw in that.
Market forces and resources decide who makes what, where. The burden is shared and the mutual reliance gives everyone a reason to put a peg on their noses and get on with each other. That's how you maintain a degree of peace in an antagonistic world.
You need to be good at something that other nations need, and you can then plug yourself into the mutual dependency. It doesn't matter what it is, but instead of weaponising it and blocking it, you trade it in return for the stuff that you need. You might not like your trading partners, but you sell stuff to them, they sell stuff to you, and a degree of diplomatic civility is maintained.
We all have some skills, some resources and some manufacturing. So focus on what you are good at, and stay on speaking terms with everyone else. You get global trade and a degree of peace.
Instead of trying to woo the likes of Intel and TSMC, wouldn't Europe be better off aiming at home grown companies, in non x86 or "AI" fields?
If a car is supposed to have 3000 chips (no idea how they go to that number), then aim for the 2900 little chips rather than the 100 big ones.
Less depending on foreign investment, and start investing inwards.
Why are EU and MAGA both so *obsessed* with what the automotive industry wants? It’s a lousy industry.
The average is more like 1500 chips; 3000 is for a super-luxury fully-loaded with options that almost nobody has. The average price of those chips is about 50 cents each, the bulk is sensors and motor controllers, the *top end* of those 1500 is a bunch of €1.50 microcontrollers. So the total price is *maybe* €1000 of chips….which are selling at 10% margin. We’re arguing about €100 of value. Not even €100 per year, it’s €100 over the 15-year lifetime of the vehicle.
You want to swing your entire industrial economy around €8 per *household* per year. *Toothbrushes* have a higher Average Revenue Per User. Look it up.
Cars are probably the most complicated single item sold in large quantities to consumers. This means that the factories are big and employ lots of people. The infrastructure to support these car factories create even more jobs across many industries. The number I was taught at school was that the Sunderland Nissan plant indirectly created/supported 10,000 jobs. Of course those jobs weren't all UK based, but having the actual car factory in your country increases the chance that other parts of that supply chain create jobs in your region too.
It's a lousy industry, but it's the best in generating a constant stream of tax revenue for the state. Construction is an even bigger investment, but once a building is finished it's just a part of the landscape.
People employed in car manufacturing pay income tax every year. The car companies and dealerships pay corporate tax. Users pay fuel tax, road toll and a bunch of VAT on servicing and parts. Even recycling and scrap trading is a lucrative business. Not to mention indirect income from tourism and mobility made possible by cars.
So politicians love it and they also love the money stashed in their pockets by automotive industry lobbyists. Those small 0.50 € chips power a massive money-machine that everybody wants to control. Remember - it's also the most regulated industry in the world and If you can't make one of those 'driver alertness sensors' you may be forced out of the whole market.
IMHO the EU already produces more than 20% of the world's IC's by VOLUME but not by VALUE. The semiconductors made in Taiwan are mostly high-end, used in GPU's, AI accelerators and top-of-the-line CPU's for PC's and smartphones sometimes costing hundreds of dollars a piece.
The semiconductors made in Europe are mostly made using low to medium complexity semiconductor processes for use by the automotive, consumer products (washing machines, audio) and smartphone sector. These are low-cost but made in large numbers.
So it all depends on your metric. If Europe wants to compete with Taiwan, Korea and the U.S. it will indeed have to invest a LOT more money. A single high-end semiconductor plant can cost up to $100 billion these days.
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