After the US and Japan, the EU also steps up semiconductor support... "Will ease state aid regulations"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The European Union (EU) has announced plans to ease subsidy regulations and actively provide financial support for the semiconductor sector. A comprehensive support policy known as the "European Semiconductor Act" is expected to be introduced as early as the beginning of next year. Following the United States and Japan, the EU has declared national-level support under the pretext of resolving semiconductor supply chain issues, signaling that competition within the semiconductor market is expected to intensify further.

On the 18th (local time), Margrethe Vestager, Vice President of the European Commission, stated at the EU Commission's competition policy review report presentation held in Brussels, Belgium, "We are considering easing the EU's state aid regulations to allow member state governments to provide financial support to the semiconductor business sector," adding, "In the future, we will be able to approve national support to alleviate funding difficulties faced by companies aiming to build cutting-edge semiconductor factories in Europe."

According to the Associated Press, the EU has so far strongly prohibited state subsidies not only for EU member states but also for imported products outside the region, aiming to protect the internal market. However, due to the semiconductor supply shortage that has continued since last year, which has caused production declines in major European automakers and significant industrial damage, the EU has shifted towards allowing subsidies specifically in the semiconductor sector.

Along with easing subsidy regulations, the EU is also discussing the European Semiconductor Act to foster the semiconductor sector comprehensively. Earlier on the 15th, Ursula von der Leyen, President of the European Commission, visited the ASML semiconductor factory located in Eindhoven, the Netherlands, and stated, "We will present the European Semiconductor Act early next year to strengthen Europe's competitiveness and sovereignty in the semiconductor sector."

Accordingly, following the United States, which announced the "CHIPS for America Act" in June, and Japan, which recently introduced a subsidy system for the semiconductor and battery industries, Europe is also moving to support semiconductors, making competition more intense. The EU plans to increase its semiconductor market share to 20% by 2030.

As industrial competitiveness within Europe is also expected to strengthen, there are forecasts that the EU will announce additional semiconductor support measures in the future. According to CNBC, global management consulting firm Kearney analyzed in a report that "if a large semiconductor factory complex is established in Europe, it could generate an economic ripple effect of up to 85 billion euros (approximately 114 trillion won) over the next 10 years, which would be more than twice the investment required for its establishment."

This content was produced with the assistance of AI translation services.