The EU has pledged over $150 billion to develop next-generation digital industries this decade to raise self-reliance in advanced technologies like chips and AI, the Wall Street Journal reports.
- The initiative funded as a part of the $2 trillion pandemic recovery package aims to boost the bloc’s technological autonomy by 2030.
- The initiative was mainly triggered by U.S. trade disputes with China, further aggravated by the pandemic-induced supply-chain bottlenecks and automotive microchip crisis.
- Last month President Biden issued an executive order launching a review of products and sectors vulnerable to supply-chain disturbances from geopolitical and economic competition. The U.S. Congress recently passed legislation to give chip companies grants and financial incentives.
- Europe’s latest plan sought to digitalize European businesses, public services and improve Europeans’ digital skills and infrastructure. The funding would be provided from the $796.6 billion (€672.5 billion) Recovery, and Resilience Facility in the EU economic package with at least 20% earmarked to promote Europe’s digital transition. The main goal was to produce at least 20% of the world’s semiconductors by value in 2030, up from 10% last year.
- China set up a government-backed $29 billion fund to boost its domestic chip industry in 2019 and recently announced its plans of fast-tracking development in advanced technologies, including chips, over five years.
- Europe’s leading semiconductor companies include the Netherlands’ ASML Holding NV (NASDAQ: ASML), Germany’s Infineon Technologies AG (OTC: IFNNF) (OTC: IFNNY), and Netherlands’ NXP Semiconductors NV (NASDAQ: NXPI), whose presence is relatively insignificant compared to Intel Corp (NASDAQ: INTC) or Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM).
- Price action: ASML shares are up 6.82% at $536.42, IFNNF shares are up 3.88% at $40.51, and NXPI shares are up 6.02% at $181.3 on the last check Tuesday.
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