EU firms partner with Asian suppliers and leverage Chips Act funding to build semiconductor independence amid US-China tensions, while expanding AI infrastructure.
As Huawei’s Ascend chips gain traction and Nvidia faces export restrictions, European manufacturers are finalizing deals with Taiwan’s Coretronic for display components while redirecting €3.3 billion in Chips Act funding to RISC-V processor development.
Supply Chain Shifts Reshape European Tech
German automotive suppliers confirmed to Reuters on 28 June 2024 that they’re adopting Coretronic’s Vietnam-made backlight modules, replacing 30% of Chinese components. This follows Apple’s reported 18% production increase in Tamil Nadu, India, where Foxconn now assembles 1 in 7 iPhones sold globally.
EU Chips Act: From Funding to Fab
The European Commission’s June 2024 €3.3 billion injection into the Chips Act targets RISC-V development, with STMicroelectronics CEO Jean-Marc Chery stating: ‘Open-source architectures let Europe write its own playbook.’ This comes as Huawei’s Shanghai factory reportedly ships 400,000 Ascend 910B AI chips monthly – double Q1 2024 volumes.
Global Ripple Effects
Amazon Web Services warned EU clients on 25 June of potential 12% cost hikes from US tariffs on Chinese server racks. Meanwhile, Iron Mountain’s new Frankfurt data center, operating at 98% capacity since its 27 June launch, highlights Europe’s AI infrastructure demand surge.
ASEAN’s Rising Strategic Value
Thailand’s new $1.4B EV incentives have attracted 23 European auto parts makers since April 2024, while Vietnam’s chip packaging output grew 19% YoY in Q2 according to Nikkei Asia. ‘Southeast Asia isn’t just China+1 anymore – it’s becoming our primary resilience hub,’ stated ASML CFO Roger Dassen during a 26 June investor call.
Historical Context: Europe’s Tech Balancing Act
The current semiconductor push mirrors the EU’s Horizon 2020 quantum computing initiative, which allocated €1 billion between 2018-2020. Just as that program helped create 15 quantum startups now valued over €200 million collectively, today’s Chips Act investments aim to seed next-gen chip design capabilities. However, challenges remain – Europe’s share of global semiconductor manufacturing capacity has declined from 24% in 2000 to 8% today according to SEMI data.
Precedents in Strategic Autonomy
The automotive sector offers a cautionary parallel. When Europe faced battery supply chain vulnerabilities in 2021, the European Battery Alliance mobilized €6.1 billion in public-private funding. By 2023, EU-based battery cell production reached 77 GWh – still just 12% of global output, but a 300% increase from 2020 levels. Similar scaling timelines suggest the Chips Act’s 2030 targets will require accelerated fab construction and talent development.
