US and EU want to avoid ‘subsidy race’ over chip manufacturing
Coordinated efforts by the U.S. government and EU could increase focus on fixing the global chip shortage.
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What you need to know
The U.S. government and the European Union will take steps to avoid a “subsidy race,” according to a report byReuters. The outlet stated that the U.S. and EU will announce a joint effort at the second meeting of the U.S.-EU Trade and Technology Council, which will occur on Monday, May 16, 2022.
“You’ll see us announce… a transatlantic approach to semiconductor investments aimed at ensuring security of supply” said a senior administration official.
The joint effort will be made to prevent a subsidy race that would see countries compete for chip manufacturing.
The ongoing global chip shortage has caused supply issues across a range of industries. Several governments and large companies have committed to investing millions of dollars to alleviate the shortage. Without cooperation, however, countries could end up competing rather than focusing on fixing a global issue.
An official told Reuters and other reports that the EU and the U.S. government want to promote chip investment in a “coordinated fashion” and that they don’t want to “encourage a subsidy race.”
The U.S. government is considering a$52 billion funding bill for chip manufacturing, but it has not passed through Congress. The proposedEuropean Chips Actcould also see significant funding put toward chip production.
At the same meeting, the governments will announce an early warning system to identify and address supply chain disruptions in the semiconductor industry, according to the report.
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Secretary of State Antony Blinken, Commerce Department Secretary Gina Raimondo, and U.S. Trade Representative Katherine Tai will headline the event. An official also told Reuters that EU trade chief Valdis Dombrovskis and EU antitrust chief Margrethe Vestager will participate.
Sean Endicott is a tech journalist at Windows Central, specializing in Windows, Microsoft software, AI, and PCs. He’s covered major launches, from Windows 10 and 11 to the rise of AI tools like ChatGPT. Sean’s journey began with the Lumia 740, leading to strong ties with app developers. Outside writing, he coaches American football, utilizing Microsoft services to manage his team. He studied broadcast journalism at Nottingham Trent University and is active on X @SeanEndicott_ and Threads @sean_endicott_.
