EU May Struggle To Fund $48 Billion Chips Act (appleinsider.com) 29
Europe's ambitious plans to quadruple processor production are facing problems securing the required $48 billion without disrupting state aid and other existing projects. Apple Insider reports: Following the US Senate's allocating of $52 billion to boost domestic semiconductor production, the European Union is aiming to make similar investment. However, under EU laws, funding is chiefly already committed to projects until 2027. Nonetheless, according to Bloomberg, EU internal market commissioner Thierry Breton, has said that the plans will be "commensurate" with the US. At the same time, Commission President Ursula von der Leyen said the total investment would be $48 billion.
Plans for the EU Chips Act are due to be published on February 8, 2022, but it is already known that it requires investment from both public and private resources. Bloomberg says that $30 billion has been earmarked from public sources, and the remainder will include at least $12 billion from private companies. It's not clear where the rest of the shortfall will come from, but reportedly according to documents seen by Bloomberg, the larger question is over the bulk of the public funding.
The investment allegedly depends on EU countries with already over-stretched budgets. It's also possible that previously allocated funds may be changed, plus there are concerns about the loosening of state aid rules in order to finance the plan. EU plans reportedly say that state aid, "must be necessary, appropriate and proportionate." They go on to say that the EU will monitor state aid use to ensure it doesn't "adversely affect trading conditions."
Plans for the EU Chips Act are due to be published on February 8, 2022, but it is already known that it requires investment from both public and private resources. Bloomberg says that $30 billion has been earmarked from public sources, and the remainder will include at least $12 billion from private companies. It's not clear where the rest of the shortfall will come from, but reportedly according to documents seen by Bloomberg, the larger question is over the bulk of the public funding.
The investment allegedly depends on EU countries with already over-stretched budgets. It's also possible that previously allocated funds may be changed, plus there are concerns about the loosening of state aid rules in order to finance the plan. EU plans reportedly say that state aid, "must be necessary, appropriate and proportionate." They go on to say that the EU will monitor state aid use to ensure it doesn't "adversely affect trading conditions."
Note to the English -- (Score:2, Funny)
Re:Note to the English -- (Score:4, Insightful)
Before the court issues a date to hear the complaints, China's FAB will have completed construction, the labor force will be in full swing at the mine, the dam will already be diverting water, and energy will be produced by the local coal power station or giant solar farm they decided to make and build over night. Thats why money isn't the answer in Europe (and to a lesser extent, the US). It's lower regulatory hurdles to complete these projects.
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Re: Note to the English -- (Score:2)
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Did you miss Brexit?
These are EU chips.
What, so they come with mayo instead of vinegar?
Most of the EU countries will (Score:1)
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The article is about an initiative of the Commission. Economical or industry programs lies within its competences, so it can autonomously decide to manage its industry budget to create a Chip industry, or negotiate additional funds.
However: The Commission has no word about NATO (entirely the problem of the countries who chose to join) and has limited influence on questions of defense. The Commission does not run a significant defense program, does not have autonomy to launch one, is not in the line of comma
What could possibly go wrong? (Score:3, Interesting)
They a need a system friendlier to deficit spending like good ol' USA's.
(Keynesian stimuluses are a good thing during slumps, but one needs to pay debt back down during boom years. The second part is where the US keeps failing.)
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The EU is actually pretty good at funding stuff. Better than national governments.
The main issue at national level is that funding is only guaranteed for one term in office. At the EU level it lasts longer. It also gets distributed according to need, rather than based on local politics. That's why much of the UK is now screwed, the EU money went where it was needed by the meagre replacement cash from the British government goes where it needs votes or where Tory Party donors operate.
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> The EU is actually pretty good at funding stuff
Note my statement about deficit spending in the US was intended as mostly sarcasm.
TIme for FInes (Score:1)
Looks like it's time to extort, er "fine" some American tech companies.
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taxpayers should own the result (Score:2)
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If taxpayers bail them out, taxpayers need to own a proportionate share of the resulting business.
True, but let me sum it up here.
"it is already known that it requires investment from both public and private resources. Bloomberg says that $30 billion has been earmarked from public sources.."
So, it's already "known" that rich private companies who stand to make trillions off this, somehow shouldn't be the ones footing this bill. Tells you all you need to know about your requests. No point in even ranting about fairness-for-all concepts anymore. You already know it's bullshit the moment you say it. Our world isn't just comfortable with mass corruption anymore. It welcomes it.
The never-ending addiction to Greed, will be the reason our species will never leave
Government shouldn't get involved at all (Score:2)
If chipmakers can't come up with capital to build more fabs, there probably isn't a good business case for it. The market is in a state of shortage right now, and will be for the next year or so. But I suspect it might crash.
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Full unregulated market works so good!
Where did you see one of those?
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The semiconductor industry has been boom and bust for decades. A lot of companies have been hurt badly by investing in additional supply capacity and then demand fell off. I expect that will happen this time too.
But then there's a lot to be said for having a reliable domestic supply, even if it has to be subsidized.
US $ isn't confirmed yet either (Score:3)
I hadn't heard about this $52B in spending.
https://www.detroitnews.com/st... [detroitnews.com]
The House just passed a $52B semiconductor bill this week. The Senate passed it's own $52B bill last summer (bipartisan even!). So now a new bill would have to be written and go back to both houses. Maybe this gets negotiated out and actually passes.
I think overall it is a wise decision to have some amount of domestic production of some for these parts, even if it has to be subsidized to some degree.
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The Senate is already working out which things are in both bills and so will be in the final version. It isn't a "new bill," it is just the final bill. It is a pretty simple process, it would be really weird for anybody to change their vote and stab big business in the back.
Easy solution; expire fossil fuel subsidies (Score:2)
This is easily paid for just by expiring all fossil fuel subsidies and tax exclusions for them.
Do it.
This won't work (Score:3)
Commission President Ursula von der Leyden said the total investment would be 48 billion volts.
couldn't resist
You mean ... (Score:2)
Profit Plan (Score:3)
1. Europe and USA spend billions increasing overall chip production capacity by 400-600%.
2. Pandemic ends, supply chains clear up, chips start flowing again
3. Supply of chips floods the market, tanking prices
Profit!