The United States and the European Union announced a major deal to cooperate on chips

The United States and Europe issued a heavy announcement today that the two sides will reach cooperation on the chip supply chain.

The most important matters discussed by European and U.S. officials at the inaugural European-American Trade and Technology Council in Pittsburgh on Wednesday (Sept. 29),

“We are committed to forging a U.S.-European partnership … to design and manufacture semiconductors that are more powerful and resource-efficient,” the White House said in a statement.

Other topics discussed at the Committee on Trade and Technology included fundamental principles of artificial intelligence technology; how to enhance cybersecurity in an increasingly chaotic digital world and how to advance common technical standards on an international scale.

European and American officials who participated in the preparations for the conference said that for politicians on both sides of the Atlantic, the chip crisis has made them suddenly realize how important technology is to mastering geopolitical dominance. Due to the confidential nature of the conversations, the officials only wished to speak on the condition of anonymity.

One of the areas where the two sides hope to strengthen cooperation is in semiconductor production. The chips are small but the production process is extremely complex, involving hundreds of steps and taking months. The corresponding factory facilities are also quite expensive.

France reportedly wants to start chip agenda in U.S.-EU trade and tech cooperation

As Europe and the United States forge a new technology alliance, France is seeking to control a key aspect of that cooperation – semiconductors, political news site POLITICO reported on September 29. The first meeting of the US-EU Trade and Technology Committee will be held today in Pittsburgh, Pennsylvania, USA.

But as EU governments sought to agree on a draft joint statement for the meeting this week, France blocked progress on the draft microchips, asking European governments and the United States to delay talks on structural changes to the industry, the report said. At the heart of Paris’ push, three diplomats and officials told POLITICO, is a plan to put Frenchman Thierry Breton, the EU’s internal market commissioner and former tech CEO, in control of transatlantic discussions on semiconductors. , as he tries to buy time and provide more microchip production capacity at home in the EU.

At the first meeting of the US-EU Trade and Technology Committee this week, EU Competition Commissioner Margrethe Vestager and Trade Commissioner Valdis Dombrovskis travelled to the US to co-chair the meeting with US officials. Breton will oversee the chip discussions in the coming months.

France wants to keep Breton in charge of semiconductors “at the expense of Dombrowski and Vestager,” said one of the diplomats, who spoke on condition of anonymity, the report said. The French effort comes days after Paris lost a key contract to sell submarines to Australia over a new security deal between Washington, Canberra and London, which sparked outrage from the French side.

Breton expressed doubts about the state of US-EU relations during a trip to Washington last week, days after the collapse of the Australian submarine deal, saying the EU and the US should “pause and restart” their “broken” relationship. Those concerns have permeated EU negotiations on a draft joint statement for the Pittsburgh meeting, the report said, as France asked the US-EU trade and technology committee to focus on “short-term supply chain issues” rather than deeper cooperation, which would be Discuss later.

The change will give Breton a greater chance to steer the process, which has so far been run by his superiors in the EU hierarchy; the Commission’s executive vice-presidents Vestager and Dombro Vsky mastered.

The report believes that this is likely to stoke tensions between Breton and Vestager, who oversees Brussels’ powerful competition watchdog and handles many documents from a free trade and competition-friendly standpoint, with French more of interventionist views.

Paris is considering a second meeting in spring 2022, where officials expect it will come up with mid- to long-term solutions to repair the semiconductor supply chain, according to the latest draft of the Pittsburgh statement obtained by POLITICO. At a meeting of EU ambassadors on Monday, the French side asked that the timing be removed from the Pittsburgh text because it would coincide with France’s rotating EU presidency, which could have been erroneously taken, according to a participant. explain. Instead, Paris proposed that a second meeting would take place next year.

France had been pressuring EU officials until Tuesday, the report said, as the time for the first meeting of the U.S.-EU trade and technology committee drew closer. Breton’s push comes amid disruptions to the global microchip supply chain that have rocked industries including automakers, TV makers, game console makers and electronics suppliers.

In the short term, European industry and governments hope to negotiate more chips from global semiconductor makers, which are scrambling to keep up with demand. But in the long run, the EU also hopes to diversify its supply chain by working with partners such as the US on access to chip technology and talent, but also by attracting industry champions to build cutting-edge facilities with public support , bringing chip manufacturing back into EU countries.

The move aligns with a broader Paris-led movement to strengthen Europe’s technological sovereignty by building its own tech sector, rather than relying on a global tech industry typically dominated by the US. French diplomats warned this week that the EU should not rely too heavily on the United States to solve its problems, and pushed to remove the reference to “interdependence” from the Pittsburgh draft because, according to participants, the United States has no interest in relying on Europe.

The European Union has in the past year laid out plans to boost chip production in European countries, aiming to increase its share of the global market from 10 percent now to 20 percent by 2030. Breton, who is in charge of the work, is working with European industry and governments to propose a multi-billion-euro fund to support local chip design firms such as Infineon, STMicroelectronics and NXP, Dutch chip ASML and Leading research institutes such as the Inter-University Microelectronics Center (Imec) in Belgium, the Fraunhofer Society in Germany and CEA-Leti in France.

Breton is also trying to win over chip giants Intel, TSMC and Samsung to build cutting-edge foundries in Europe to reduce reliance on Taiwanese factories, which are mainly run by TSMC, the report said. Breton has met in person with Intel’s new CEO Pat Gelsinger at least twice this year to discuss how European countries can back the U.S. giant’s promise to open a new, state-of-the-art chip foundry , which could be worth as much as 80 billion euros.

Breton will also visit South Korea on Thursday and Friday to meet with South Korean lawmakers and executives of South Korean companies, including the leadership of chip-making giant Samsung. Breton’s industrial ambitions could compete in many ways with U.S. plans to support domestic chip production.

Washington lawmakers are finalizing a new bill called the “American Chip Act” that would provide $52 billion in funding to attract new investment in manufacturing, primarily from Breton looking to invest in Europe. those businesses.

Breton is also responsible for the new “European chip bill” proposed by European Commission President Ursula von der Leyen in his annual address to the European Parliament earlier this month.

According to Breton, the European plans together would reach “the approximate figure of the EU together with our member states”, comparable to the US $52 billion fund. “We are discussing a comparable amount of funding,” he told an online audience during a visit to the United States last week.

Author: Yoyokuo