Microprocessors: Europe's chip off the old block
From the outset of European integration, major corporations have steered the course. Their influence continues to shape EU policy with unwavering force. The Chips Act is another iteration.
The European Court of Auditors’ recent report on microprocessors lays bare a stark reality. It’s less about the collapse of ill-designed, poorly executed European strategies, and more about an EU molded by and for corporate giants, with minimal accountability or scrutiny.
Three years ago, L’Éclaireur explored the Chips Act, an ambitious blueprint to position Europe as a global powerhouse in microprocessors, ready to challenge Asia and North America within ten years.
Mirroring the shortcomings of "electrification" initiatives (batteries, electric vehicles, etc.) and the hydrogen strategy, the Chips Act is hampered by a critical, foundational flaw: the absence of an impact assessment. It also lacks clear, measurable targets for post hoc evaluation. Despite earmarking significant investments for semiconductors, the Chips Act relies on vague indicators without specific benchmarks and forgoes a timeline essential for tracking progress. This isn’t our assessment—it’s the Court of Auditors’.
Consequently, the Chips Act operates with virtually no oversight, especially over the massive funds deployed, undermining the ambition to rival Asia and North America in this critical sector.
The European Commission plays a limited role in the Chips Act, contributing just 5% (4.5 billion euros) of the 43 billion euros pledged, with Member States covering the rest.
“The Commission faces a data gap,” says Annemie Turtelboom of the Court of Auditors. “Without mandates requiring national authorities or recipients to report progress, the Commission cannot evaluate the impact of the funds disbursed.” It also lacks authority to enforce accountability, despite greenlighting state aid.
“The Commission can authorize aid, but it cannot force Member States to follow through. Since the funds are national, not Commission-provided, projects can be scrapped entirely, with no recourse for reimbursement,” the Court of Auditors told L’Éclaireur.
Where is the money going, how efficiently is it used, and what outcomes are achieved? The Commission’s inability to answer these questions is alarming, especially as substantial funds are funneled to a handful of companies through ever-larger subsidies. These firms “have, as of per our audit, already secured four times the public funding they received over the entire 2014-2020 period. The Chips Act is only beginning, amplifying the risks. Concentrating funds on select companies heightens the danger that significant sums could be wasted if they fail,” the Court warns. This lack of transparency and control undermines the ambition to build a robust, competitive semiconductor ecosystem.