France is planning to invest nearly €3 billion in a semiconductor factory in order to boost local production of microchips. This move comes as both Europe and the United States have passed legislation to increase investment in the semiconductor sector, amid concerns about China’s dominance in the global supply chain. Semiconductors, also known as chips, are essential components in electronic devices, and controlling the supply chains has become a major priority for major trading blocs. The funding for the project will be used to support a larger initiative aimed at increasing European production capacity. The race to secure semiconductor supplies has intensified during the pandemic, leading to supply shortages and disruptions in industries worldwide.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| France to invest €3 billion in semiconductor factory | Increase in local production | Higher European production capacity | Global competition and supply chain control |
| Chips Acts in Europe and the US to boost investment | Increased investment in the semiconductor sector | Unlocking investment and increased chip production in Europe | Fear of China gaining dominance in the global supply |
| Semiconductors vital for electronic devices | Importance of semiconductors in electronic devices | Greater focus on securing chip supplies and supply chain control | Reliance on semiconductors for various industries |
| France’s biggest subsidy since 2017 | Significant financial support for semiconductor factory | Increased government support for chip production | Government commitment to boost local industry |
| European Chips Act aims to produce 20% of global chips by 2030 | Ambitious goal for European chip production | Increased chip production in Europe | Desire to reduce reliance on foreign chip manufacturers |
| Supply of chips mainly from Taiwan | Low European chip production capacity | Increased European chip production capacity | Efforts to diversify global chip supply chains |
| Pandemic caused supply crunch for semiconductors | Disruption in global chip supply chains | Greater emphasis on securing chip supplies | Experience of supply chain disruptions during crises |
| US Chips Act funnels funds to US firms | Support for US chip manufacturers | Increased competitiveness of US chip industry | Protectionism and promoting domestic industry |
| China denies seeking global supply lines | Denial of global supply line seizure | Dispute over the US Chips Act | International trade tensions and competition |