European Chips Act Crosses the Finish Line as IPC Looks to the Future

The European Institutions recently reached provisional agreement on the European Chips Act, paving the way for the region’s introduction of an important framework to build out innovation in the European semiconductor ecosystem and security of supply for Europe’s industries.

The European Chips Act, proposed by the European Commission in February 2022, has been the subject of negotiation with the European Parliament and the EU Council (Member States). While this week’s agreement must still be finalized, endorsed and formally adopted by both institutions, it sets the wheels in motion for the roll-out of Europe’s own Chips Act. Formally, following adoption, the EU Council will pass an amendment for the establishment of the Chips Joint Undertaking under Horizon Europe. Both legal texts will be published at that time.

IPC welcomes the European Chips Act as an important step towards strengthening European leadership in innovation and secure and resilient supply chains. In the negotiation process, IPC strongly welcomed fresh emphasis brought by the European Parliament to strengthening European semiconductor packaging capability and enabling a more robust electronics ecosystem. Throughout the process, IPC has urged the adoption of a final package that reflects the strategic role of advanced packaging in driving semiconductor innovation and ensures needed funding is allocated accordingly (see our position on the initial draft legislation).

In an executive meeting with European Government officials organized by IPC and iMAPS on April 13th, industry leaders welcomed the imminent adoption of the Chips Act and its inclusion of packaging in scope. They discussed next steps needed to enable European leadership in back-end segments of the value chain, including IC substrate fabrication and semiconductor assembly & test. The meeting also included leading European EMS and Printed Circuit Board companies that underscored the next steps needed to support a more resilient European electronics manufacturing ecosystem “silicon-to-systems.”

A silicon-to-system strategy would enhance the region’s capabilities and capacities to package semiconductors into advanced components but also include the assembly of those components onto printed circuit boards. This entire silicon to systems ecosystem is necessary to support Europe’s digital and green transitions.

IPC applauds the dedicated work of the European institutions in their negotiation process on the Chips Act.  We remain committed to working with the EU Institutions, the industry and other key stakeholders in the Chips Act implementation, as well as the region’s broader initiatives to realign industrial policies to address vital vulnerabilities and ensure a more competitive, resilient and sustainable electronics industry.

For more information on the European Chips Act and Industrial Strategy, contact me at AlisonJames@ipc.org.