Regions team up to speed up the expansion of the European semiconductor industry

European Semiconductor Regions Alliance
14 Sep 2023

The European Committee of the Regions, together with the Free State of Saxony, has today launched the European Semiconductor Regions Alliance – a political network of regions engaged to strengthen Europe's capacity to produce semiconductors and microelectronics, reducing its dependency from supplies from third countries. The Alliance aims to identify and help remove the obstacles to the industry's strategic development by improving the legal framework, promoting public and private investment, supporting the sharing of knowledge and the development of strong and resilient value chains. 

The global semiconductor shortage has exposed regions' and cities' dependence on supply from a limited number of companies and its vulnerability to export restrictions from third countries and other disruptions in the current geopolitical context. The EU's share of the global semiconductor market is currently 10% by value, far below its economic weight. 

In order to support the expansion and diversification of the chip sector in the European Union, 27 regions from 12 Member States have joined forces to form the European Semiconductor Regions Alliance (ESRA) to share their experience in this strategic field and to help strengthen Europe as a key player in the global competition with the US and China. 

Michael Kretschmer, Minister President of the Free State of Saxony, opened the event and said: "The establishment of the Semiconductor Regions Alliance on the initiative of Saxony is an important milestone for the entire European Union and its future. For each segment of the global semiconductor value chain, it takes on average more than 20 countries involved in the direct supply chain to work closely together. With ESRA, we are opening up new ways for regions to collaborate, research and innovate to ensure Europe's economic and digital sovereignty. The participation of many regions in the launch event underlines the interest in increased cooperation at EU level in the field of microelectronics. The Alliance will make an important contribution to making Europe competitive in this key industry in the years to come." 

Thomas Schmidt (DE/EPP), CoR rapporteur on the EU Chips Act and Saxon State Minister for Regional Development, stated: "After the adoption of the European Chips Act, it is now a matter of implementation, of establishing new production facilities, of strengthening research and of training skilled workers. The Alliance understands itself as a partner of the European Commission in this. As rapporteur for the European Committee of the Regions, I have closely followed the European Chips Act. It is good that Saxony, as one of the largest semiconductor locations in Europe, has taken the initiative. I support the 10 points for the launch of the Alliance with full conviction. The fact that the founding event takes place in the European Committee of the Regions shows how important the regions are for Europe and for the semiconductor industry.

In the jointly signed 10-point paper, regions call for a long-term definition of funds in the EU's Multiannual Financial Framework to increase European semiconductor production as well as the best possible support and competitive conditions for the regions within the framework of the European Chips Act. 

The member regions call on the European Commission to interpret the criterion of "uniqueness" broadly to achieve the greatest possible flexibility and speed in the examination and granting of state aid in the semiconductor industry and to develop and implement solutions for a more sustainable production of semiconductors within the framework of the European Green Deal. 

They further plan to expand research and development and promote networking of research institutions in and between the various regions and promote new technologies and innovations "Made in Europe". Ensuring a sufficient water and energy supply at the production sites as well as supply, especially strategic and critical raw materials, are other goals of the Alliance, which calls on the EU to ensure a reliable framework for these efforts. ESRA also argues that an EU ban on specific EU chemicals would jeopardise the existence of the semiconductor industry. 

Michael Murphy (IE/EPP), Member of Tipperary County Council, said: “The semiconductor industry develops a rich talent pool, an extensive ecosystem with strong research links across the value chain from design to architecture, manufacturing, systems and applications. Semiconductor producers have the power to transform and do transform local economies, both directly and indirectly. It is imperative that national governments recognise the economic potential of the semiconductor industries across regions in Europe and provide the necessary support to develop a strong and integrated value chain." 

Jan Jambon, Minister President of Flanders, said: “The founding of ESRA today is an excellent example of pan-European cooperation among likeminded regions from all over the continent. Europe's research policy shines through bottom-up innovation. For the Flemish Government, research and development is of the utmost importance and value. One in five of all foreign investments in Flanders is related to R&D and the Flemish Government invests 3.6% of its GDP in innovation and is therefore at the top of rankings in Europe. Yet it is also important to complement innovation with a new model of collaboration involving knowledge institutions, industrial players and regional policymakers." 


The Alliance comprises 27 regions from 12 Member States: Baden-Württemberg, Bavaria, Hamburg, Hesse, Lower Saxony, Saxony, Saxony-Anhalt, Saarland, Schleswig-Holstein and Thuringia in Germany; Andalusia, the Basque Country, Valencia and Catalonia in Spain; Flevoland and North Brabant in the Netherlands; Carinthia and Styria in Austria; the Centro region in Portugal; Flanders in Belgium; Auvergne-Rhône-Alpes in France; Piedmont in Italy, Tampere and Helsinki in Finland; South Moravia in the Czech Republic; Wales in the UK; and the Republic of Ireland. 

On 8 February 2022, the European Commission proposed a comprehensive package of measures to strengthen the EU's semiconductor ecosystem -- the European Chips Act. The Commission's goal is to increase Europe's market share in global chip manufacturing from currently only 10% to up to 20% by 2030. 

In order to support the expansion and diversification of the chip sector in the European Union, CoR members have called in the opinion on the European Chips Act on the EU to invest more and make new funding available for the implementation of the Chips Act, building first on existing clusters and ecosystems. Cities and regions play an important role in strengthening the European semiconductor industry by bringing together all stakeholders to develop local manufacturing and research facilities, the opinion says, arguing that there needs to be targeted support for research and development of new technologies if European industry is to have a secure supply of semiconductors. 


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