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EU nears deal on $47B law to boost computer chip production

April 18, 2023 GMT

FILE - A visitor to the 21st China Beijing International High-tech Expo looks at a computer chip through the microscope displayed by the state-controlled Tsinghua Unigroup project which has emerged as a national champion for Beijing's semiconductor ambitions in Beijing, China on May 17, 2018. The European Union was closing in Tuesday April 18, 2023 on approval for a plan to ramp up semiconductor production as it seeks to ween itself off reliance on Asia for the tiny computer chips that control everything from cars to washing machines. (AP Photo/Ng Han Guan, File)

LONDON (AP) — The European Union was closing in Tuesday on approval for a plan to ramp up semiconductor production as it seeks to wean itself off reliance on Asia for the tiny computer chips that control everything from cars to washing machines.

The European Parliament and the bloc’s 27 member states struck an informal agreement for the 43 billion-euro ($47 billion) Chips Act, which pools public and private funds and allows for state aid to kick-start massive investments for chipmaking facilities.

“The Chips act puts Europe in the first line of cutting-edge technologies which are essential for our green and digital transitions,” Ebba Busch, industry minister for Sweden, which holds the rotating EU presidency, said in a statement.

The EU is scrambling to keep up with the U.S., which launched its own $52 billion Chips Act to boost the American semiconductor industry.

The EU Chips Act will link research, design and testing as well as coordinate EU and national investment. It’s aims to help the semiconductor industry develop so that the bloc’s global market share of chip production can double to 20% by 2030.

Both the U.S and the EU want to reduce their dependence on Asia, which accounts for the bulk of global semiconductor production — a vulnerability that was exposed during the COVID-19 pandemic, when supply chain disruptions led to extended shortages of autos, smartphones and medical devices.

Chips are integrated circuits that are embedded in a semiconductor, a material — notably silicon — that can manage the flow of electric current. The terms “chip” and “semiconductor” are often used interchangeably.