Technology and Science

Analysis: Taiwan’s Edge Tested as EU Pushes Chips Act 2.0

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By Howard Chang/Ai Chi

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All 27 EU countries have joined a Dutch-led coalition to revamp Europe’s approach to its semiconductor industry. TaiwanPlus explores why the EU has taken this step and what the implications are for Taiwan and the rest of the world.

REPORTER:  

The EU has realized that if Europe's semiconductor industry is unable to master advanced manufacturing processes and key critical technologies in the future, it is very likely to fall behind in the competition over AI, quantum computing and future advanced communications technologies. Against this backdrop, the Chips Act 2.0 is bound to be introduced, aiming to strengthen Europe's advantages in semiconductor-related processes and equipment and to enhance the quality and quantity of semiconductor talent training and development in Europe going forward.

The Chips Act 1.0 was primarily designed to attract and increase investment, encouraging companies to expand their semiconductor manufacturing capacity in Europe whether in Germany, the UK or elsewhere. Beyond boosting production, it also touched on talent training and semiconductor manufacturing equipment. But in the 2.0 version of the plan, there’s a stronger emphasis on the development of critical technologies. Europe already has some very strong institutions focused on advanced semiconductor chip development and they are also among the global leaders when it comes to investment and innovation in semiconductor manufacturing equipment.

In terms of talent competition and mastery of advanced technologies, we will face increasing competitive pressure from Europe and the United States.

So although China's overall technology still lags behind the West by roughly 15 years, it has gradually built its own ecosystem. On the other hand, Taiwan, Japan and South Korea, which have traditionally relied on an open-platform model to obtain wafer foundry services and help others design chips, may start to feel the impact of this shift. This is something that requires close attention. If the three major markets [of Europe, the US and China] all become self-sufficient, how can [Taiwan] sustain and extend the experience and advantages we've built up in the semiconductor industry over the years? That becomes an important challenge moving forward.