Ursula Von der Leyen, President of the European Commission, said: “Chips are very important in the technological race. They are the basis of our economies.” This plan has not yet received approval from the EU Parliament and member countries. Earlier, US President Joe Biden had announced an investment of $ 52 billion (about Rs 3,88,398 crore) to increase the manufacturing of semiconductors in America.
With the recovery in the economy after the devastation caused by Corona last year, it is becoming difficult due to the shortage of semiconductors. Some customers in Europe have had to wait for almost a year for their new car because of this. von der Leyen said, “The pandemic has also revealed vulnerabilities in the supply chain. We have seen the entire production line halt because of this. Demand is increasing but it is becoming difficult to meet due to the shortage of chips.” Due to the shortage of electronic parts, some factories have had to be temporarily closed and workers have been rendered jobless.
Semiconductors are tiny microchips used in everything from cars to smartphones. Most of the companies manufacturing semiconductors are in Asia. Von der Leyen said the investment would be coordinated, adding research, design, testing investments to Europe’s Chips Act. The EU Commission has promised that each project under the Chips Act will be carefully examined on anti-competitive grounds. Von der Leyen said, “Europe needs modern production plants, which will cost a lot.” Europe accounts for only nine percent of the global market for semiconductors. There is a plan to increase this to 20 percent by 2030. Due to the shortage of semiconductors, some global automobile companies have had to reduce their production. This is likely to affect the profits of these companies as well.
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