Technology

Chip-makers may play states ‘against each other’ over semiconductor subsidies

Vestager’s words seem targeted at Intel, which is chasing EU support to help build more local capacity

The EU Union would need to invest up to €330bn upfront to fully supply its own chip demands, Margrethe Vestager said. Photograph: Olivier Hoslet/EPA

Fri Nov 12 2021 - 20:17

Chip-makers may play off governments “against each other” for subsidies to fix semiconductor shortages, the EU’s antitrust chief Margrethe Vestager has warned.

While such action is tempting for companies in the current circumstances it “risks letting taxpayers – whether European or American – pick up the bill, and get little from it”, she said in a speech in Leuven, Belgium, on Friday.

Ms Vestager’s words seem targeted at Intel, which is chasing European support to help build more local chip capacity. European leaders have called for more investment to alleviate a supply shortage that is rippled through several industries.

The Dane, who polices government funding for industry, said state aid can only be justified if necessary to start a project, if benefits are shared widely and without discrimination across the EU.

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The EU would need to invest up to €330 billion upfront to fully supply its own chip demands, Ms Vestager said.

“Self-sufficiency is an illusion” that would lead to “more expensive chips and a negative impact on all kinds of markets”, she said.

She called instead for a diversified supply chain with international efforts to assess vulnerabilities and early warnings for potential shortages. Co-ordinated export controls we also needed, she said, a reference to US measures that some European officials have blamed for worsening chip shortages. – Bloomberg

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