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  5. International: The European Union Chips Act - Redrawing the European Union semiconductor industry's map with new opportunities and risks for Nordic companies

International: The European Union Chips Act - Redrawing the European Union semiconductor industry's map with new opportunities and risks for Nordic companies

30 Nov 2023    1 minute read
Digital Transformation Supply Chains Semiconductor Investment

In brief

On 13 September 2023, the EU adopted Regulation 2023/1781 ("EU Chips Act"), which draws out a new legal framework for the EU semiconductor industry. The Act's main purpose is to create the conditions necessary for the security of supply and to bolster the competitiveness of the EU semiconductor industry. In this article, we have compiled the central features of the EU Chips Act and addressed which opportunities and risks we see associated with the Act for Nordic companies.

Contents

Key takeaways

  1. The EU Chips Act introduces a comprehensive framework for the EU semiconductor industry, offering companies both opportunities and risks. While it provides substantial funding for research, development, and production, it also comes with stringent protective measures in times of supply crises.
  2. Companies may benefit from large-scale funding initiatives for the development, research, and production of semiconductors and chips design, channeled by an investment facilitation framework that will be financed by various programs under the Chips for Europe Initiative.
  3. The EU Chips Act introduces special statuses, such as integrated production facility (IPF) and open EU foundry (OEF), that are intended to streamline administrative procedures and offer priority access to resources to reduce transactional costs, including the opportunity to seek State aid.
  4. Companies should be aware of the Act's extensive powers during a semiconductor crisis. The powers vested in the Commission amount, in practical terms, to an expropriation of the business, constituted by information obligations and a requirement to adhere to priority-rated orders. Non-compliance may result in fines up to EUR 300,000 or periodic fines, depending on the nature of the infringement.
  5. Nordic companies in the semiconductor sector should carefully navigate the opportunities and risks presented by the EU Chips Act. By strategically leveraging the funding and streamlined processes while ensuring compliance during crisis situations, they can position themselves for success in the evolving EU semiconductor landscape.

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Contact Information
Olof Konig
Partner
Stockholm
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olof.konig@bakermckenzie.com
Larissa Barhebréus
Associate
Stockholm
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larissa.barhebreus@bakermckenzie.com

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