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EU and Japan with joint actions to heal the chip industry

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EU and Japan with joint actions to heal the chip industry

The EU, the US and Japan are determined not to allow another crisis in chip production
(photo: ASML)

The pandemic has caused chip shortages and prompted US officials to work with foreign trading partners to address the shortage and prevent future anomalies. The initiative grew into laws to subsidize the domestic semiconductor industry not only in the US, but also among European Union partners and Japan.

In July, Japanese and European authorities may conclude a cooperation agreement on subsidizing regional chip industries. Thus, the two countries will try to optimize costs and form partner supply chains, Nikkei Asian Review claims.

US authorities may also participate in the exchange of information in this area. The emergency response system, which hinders the rhythmic supply and production of semiconductor components, will be improved.

The partners hope in this way to avoid excessive financing of local production and disruptions in the supply of semiconductor components.

Overproduction of chips will also not lead to anything good. Such an anomaly can result if governments get caught up in subsidizing enterprises spread across the planet.

Japanese authorities are still averse to long-term planning in this area, awarding $14 billion in subsidies for the current and previous years, while the U.S. has earmarked $52 billion over five years, of which $39 billion will go to building chip manufacturing plants. The EU will allocate €43 billion to the chip industry by the end of the decade.

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