EU Report Warns: Chip Supply Chain Tied to US-China Relations, Outlook Grim

(Taipei, July 3, CNA, Amsterdam - Reuters) A report funded by the European Union stated today that China's export controls, reliance on US technology, and structural weaknesses in Europe's chip industry mean the future outlook for the EU's chip industry is "dim." Without swift action to strengthen domestic supply capabilities, it will face greater risks.

The report, jointly published by the European Union Institute for Security Studies and the French think tank Institut Montaigne, indicated that China's export controls on critical minerals and the risk of war in the Taiwan Strait both pose threats to chip supply.

The report pointed out that the EU's high reliance on US technology also constitutes another vulnerability. Furthermore, the US may in the future demand that ASML, Europe's most valuable company and a major manufacturer of chip manufacturing equipment, cease exporting related equipment to China, which would expose Europe to more risks.

Currently, the US Congress is deliberating a bill that, if passed, would authorize Washington to impose export controls on allies and their companies.

Joris Teer, a policy analyst at the European Union Institute for Security Studies and co-author of the report, stated, "While Beijing appears to remain the biggest threat, reliance on Washington has become a more worrying issue under a second Trump administration."

The European Commission is actively strengthening the EU's semiconductor industry and proposed the "Chips Act 2.0" in June this year, hoping to provide incentives to boost demand for domestically manufactured chips in Europe.

Additionally, the EU has joined the US-led "Pax Silica" initiative, cooperating with allies to ensure the security of the semiconductor supply chain.

Laith Altimime, president of SEMI Europe, expressed agreement with the report's emphasis on the importance of building a more reliable supply chain.

He said, "Without stable access to critical raw materials, Europe's chip ecosystem will not be able to compete, drive innovation, or sustain growth."

Teer pointed out that in addition to cooperating with allies to address China's challenges, Europe's "only viable path" is to leverage its existing advantages in areas such as chip manufacturing equipment to further enhance its influence. (Compiled by Xu Rui-cheng) 1150703

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