EU semiconductor industry and its impact on energy policies


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The semiconductor industry already plays a crucial role in the global economy and will remain a critical asset for future developments in all the most critical areas of digital and AI-related innovation. Thus, semiconductors are a key feature for the European Union and its member states. From such a perspective, the EU currently faces a dual challenge: ensuring a secure and competitive semiconductor industry while keeping momentum for its green transition and ensuring a clean energy future. These seem like separate goals, but in the end they are intricately linked, as the EU’s policies in such areas not only aim to address individual concerns but also to leverage their synergy in order to create a strong and sustainable technological environment.

We know that the European Chips Act has been developed as a cornerstone of the EU’s strategy on semiconductors. Brussels recognized the EU’s current dependence on foreign chipmakers, especially from Asia, and thus sought to bolster the domestic production capacity in the European member states. The Chips Act sets the goal of achieving a 20% global market share by 2030, up from the current 10%. Unfortunately, when speaking about the EU’s semiconductor strategy, we also have to take into account environmental considerations. A report by the website “” highlights the potential for increased energy consumption with new chip fabrication facilities across the European Union, as the energy-intensive nature of chip production could potentially jeopardize the ambitious EU’s Green Deal goals of achieving carbon neutrality by 2050.

Such a potential conflict between industry demands and climate issues underscores the importance of integrating energy policy with the Chips Act. In one way, the EU can surely mitigate the environmental impact of more robust chip production by promoting the use of renewable energy sources for manufacturing. The EU can apply incentives for using clean energy that could be embedded within the Chips Act in a way to encourage companies to adopt sustainable practices. Additionally, the European Union can also foster research into energy-efficient chip manufacturing processes that can further reduce the environmental impact of the semiconductor industry.

Let’s not forget how the EU’s energy policy itself is also undergoing a really significant transformation. The REPowerEU plan, launched in May 2022 in response to the energy crisis created by Russia’s aggression against Ukraine, aims to accelerate the transition to renewable energy sources while reducing the dependence on Russian fossil fuels. The REPowerEU plan emphasizes the diversification of energy suppliers on the global stage, investing in renewable energy infrastructure, and improving energy efficiency. It comes as no surprise that a key aspect of the REPowerEU program is the increased deployment of solar and wind energy across the whole continent. These two kinds of renewable sources are not only environmentally friendly but can also provide a stable and secure energy supply for the burgeoning semiconductor industry. Furthermore, all the advancements made in energy storage technologies can ensure a consistent flow of clean energy to chip fabrication plants in the EU.

Looking at it from another perspective, advanced chips are essential for developing and deploying smart grids, managing energy consumption efficiently, and integrating renewable energy sources into the power grid—all features that are crucial to the EU green transition. Even advancements in sectors like artificial intelligence, facilitated by a robust European semiconductor industry, can further optimize energy production and distribution.

Written by: Francesco Marino

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