Introduction
As the ownership of advanced technology means more controlling the economy and politics in today’s world, the European Commission presented a groundbreaking tool aimed at assessing China’s growing manufacturing of the first and second generation computer chips. It is a part of the overall policy to protect European semiconductor manufacturing centres and remain an important CNMI in the global production chain.
China’s Legacy Chip Expansion: A Growing Concern
The latest survey carried out by the European Commission regarding the semiconductor industry is a good start towards considering the impact of China’s shift to the manufacturing of old generation chips. Global sales of chips are expected to have a dramatic shift due to Chinese investment in this sector which is predicted to reach more than 150 Billion US dollars in 2025.
Key aspects of China’s legacy chip strategy:
- Subsidies promoting rapid growth of organisations
- The business was expecting an annual growth of 15% in the legacy chips production
- Some futurist issues, such as the global market oversupply.
European Semiconductor Industry: Doing It Right
Semiconductor companies in Europe have been caught in the middle, you could say. On the one hand, the opposition is quite genuine, mainly due to China’s market growth chances, which might reach 20 billion Euros per year, but on the other hand, it displays long-term risks to Europeans’ competitive advantage.
The Dutch semiconductor manufacturer thinks 14% of its revenue in 2023 will come from Chinese clients, which is EU’s largest saving from hi-tech equipment, indicating the importance of revenue numbers.
EU’s Fact-Finding Mission: Holistic Model
The European Commission’s survey, set to conclude in September 2024, aims to gather crucial data on:
- Sourcing modes of industrial companies
- Pricing strategies of chip manufacturers
- Competitor analysis by country, specific to Chinese competitors
It will be used in forming the future polices of the EU, which in turn may influence the trade between the EU and China, which stands at over € 700 billion per annum.
Geopolitical Implications: Beyond Semiconductors
The EU’s problem with legacy chips is the con of it that is a part of the EU’s evolving approach to China. Recent actions include setting tariffs as high as 37.6% on Chinese electric vehicles, implying a new strategic position to defend more European industries.
Several trade analysts have warned that this may be the start of a new phase of EU-Chinese relations with impact felt in most if not all the sectors of activity today ranging from telecom equipment to renewable power.
Conclusion
The more the European Commission researches the dynamics of the worldwide semiconductor market, the more valuable this survey will become to inform the EU’s technology and trade initiatives. Thus, Europe’s future relies on it as the semiconductor industry is predicted to be worth $ 1 trillion by 2030. The following months will reveal the uniqueness of the EU’s approach and the interaction of technological progress, economic benefits, and geopolitical considerations in the context of semiconductors’ continuous evolution.
