The European Court of Auditors (ECA) has published a report stating that the European Union (EU) is heavily dependent on Chinese microchips for everyday devices. According to the report, around 33% of mass-market chips used in cars and home appliances are imported from China. At the same time, the EU is significantly behind the target of capturing 20% of the global semiconductor market by 2030, as set out in the European Chips Act.
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According to the ECA, the current pace of development of semiconductor production within the EU does not allow to meet the growing domestic demand. The auditors pointed out that European chipmakers, including Infineon (Germany), NXP (the Netherlands) and STMicroelectronics (France-Italy), are not able to cover domestic needs. In 2024, the negative balance of trade between the EU and China in semiconductors amounted to €9.8 billion. In addition to China, there is also a deficit in trade with Taiwan, the world’s leading center for the production of more advanced chips.
While global demand is focused on advanced chips used in smartphones and data centers, demand for less complex, mature chips also remains high. These components are essential for low-power devices and play an important role in the transition to more sustainable technologies. European auditors have warned that the gap in this segment will only widen.
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The Court of Auditors has critically assessed the progress in implementing the “Chip Act”. The document emphasizes that the EU is “far” from achieving a 20% share in the global microchip value chain by 2030. This goal is considered to be “proclaimed” rather than based on the EU’s real capabilities. In July 2024, the European Commission already acknowledged that the expected share by 2030 will be no more than 11.7%.
In response to the growing risks of dependence on external suppliers, the EU conducted a survey of companies producing and using previous generations of chips. The study looked at the use of these technologies in cars, household appliances and medical devices. The reason was concerns that companies subsidized by the Chinese state were undermining the position of European manufacturers. The study was coordinated with Washington and was accompanied by a similar survey conducted in the United States under the administration of President Joe Biden.
Annemie Turtelboom, a member of the European Court of Auditors, said geopolitical tensions between the EU and the US had made the issue of reducing dependency even more pressing than it was a year ago. “We already know about the risks associated with imports from countries with which we have uncertain relations. But we may not be able to rely on traditional allies for microchip supplies at all,” she said.