E.U. must focus more on investing in chip designing.

In order to become less dependent on China, researchers have advised the EU to invest more in chip designing.


Earlier in 2021, when a new semiconductor plant in Dresden, Germany was inaugurated by Bosch, a German engineering and technology company received extensive local media coverage. There are very few state-of-the-art chip production facilities that are quite far across the E.U. At this plant, back in July, Bosch spokesperson Annett Fischer told DW that their semiconductor facility is Bosch's first AIoT factory that combines artificial intelligence (AI) with the Internet of Things (IoT). Technology expert from the Berlin-based think tank Stiftung Neue Verantwortung (SNV) referred to the Bosch plant as a state-of-the-art facility for power electronics for the automotive portfolio it has been specializing in and also said that this plant is not a little drop in the semiconductor ocean.

By the end of the year, the European economies were the ones that got severely affected by the global chip shortage which negatively impacted their production flows. Many carmakers had to even delay their vehicle deliveries. Additionally, there was also a shortage of internet routers, along with gaming consoles and several other items that rely heavily on semiconductors. Europe is more dependent on overseas suppliers in matters of chips for the consumer electronics sector. Kleinhans told DW that while speaking in terms of smartphones, laptops, or cloud data centers they cannot aid the U.S., China, and other competitors, as almost none of those arrive from European players.

Furthermore, an analysis on what Europe's answer to China's rise in semiconductors should be was co-authored by Kleinhans and a Chinese analyst John Lee, who was with the Mercator Institute for China Studies (MERICS) until recently. The recommendations for policymakers on how to decompress the impact of China's rising force in the chip industry on E.U. economies were formulated by them. The European Commission is working on the European Chips Act, as it is completely aware of the bottlenecks of the current chip shortage and their far-reaching implications.