EU seeks to supercharge computer chip production

The European Commission has set an ambitious target to boost production of cutting-edge computer chips by the end of the decade.

It wants 20% of such chips, in terms of value, to be manufactured within the EU by 2030. It was 10% in 2020.

The pledge comes at a time when supply has failed to meet demand, causing problems for car-makers and others.

Part of the challenge will be that the US and mainland China are also seeking to increase their own output.

At present, Taiwan's TSMC and South Korea's Samsung dominate, with the two companies being the only ones capable of physically producing the very latest in chip tech.

"We are in a sort of paradoxical situation where Europe is using a lot of these different types of technology, but we're producing little," said European Commission executive vice-president Margrethe Vestager.

"Yet [chip] production is reliant on machinery produced in Europe. So... there is an interdependency here."

One observer suggested growing US-China tensions had prompted the commission into action.

"Semiconductor chips are one of those overlooked but incredibly important strategic components on which masses of technology are built," said Emily Taylor from the Chatham House think tank.

"So this is a very interesting development, and it's welcome to see any initiative that stimulates innovation."

Hard to master

Europe used to have a thriving chip-making industry.

But while the Netherlands is still home to NXP Semiconductors, and Germany is the base of Infineon Technologies, they and others have outsourced much of their production.

Setting up cutting-edge fabrication plants is a hugely expensive business.

A large plant can cost up to $20bn (£14.3bn) to build and kit out, according to a report by the US's Semiconductor Industry Association (SIA) last year. And it can take many years before the factories make a profit.