EU mirrors U.S. with $47 billion package for made-at-home microchips

April 19 (UPI) -- Mirroring developments in the United States, members of the European Union approved a $47 billion package meant to increase the bloc's market share in semiconductors.

Dubbed the Chips Act, the same name as parallel legislation passed in the United States, the measure aims to increase Europe's market share for semiconductors from 10% to 20% by the end of the decade.

Thierry Breton, the European commissioner for the internal market, said Europe is taking steps to ensure it's not exposed to some of the geopolitical risks associated with semiconductors.

"Semiconductors are essential building blocks of the technologies that will shape our future, our industry and our defense base," he said. "Europe aims to become an industrial powerhouse in the markets of the future."

The measure calls for some degree of self-sufficiency in semiconductors, backs large-scale innovation and prepares the block for potential supply-side issues. The bloc said that semiconductors are at the center of a technological race that has broad-based geopolitical ramifications.

Microchips are "essential" to the digital age, but manufacturing is based in only a few select economies. To respond, the EU needs to move from a position of domestic strength.

"Recent shortages of semiconductors have highlighted Europe's dependency on a limited number of suppliers outside of the EU, in particular Taiwan and South-East Asia for manufacturing of chips, and the United States for their design," a Wednesday statement from the European Commission read.

Similar policies in the U.S. economy back a made-at-home technology sector for everything from the batteries needed to power electric vehicles to the microchips that run mobile phones. Policies backed by U.S. President Joe Biden so far have led to $300 billion in investments in the private sector for infrastructure improvements, and to boost manufacturing and supply chains, including $52 billion in federal funding provided through the CHIPS Act to produce semiconductors in the United States.

For Ebba Busch, the Swedish energy minister, similar legislation is necessary to support a technological revolution in the European economy.

"The Chips Act puts Europe in the first line of cutting-edge technologies which are essential for our green and digital transitions," she said.