The Czech EU Council presidency has put forward a compromise text on the Chips Act, obtained by EURACTIV, pitching changes to the scope, requirements for special facilities, consortia setup, crisis monitoring and response.

The Czechs circulated a compromise text on the Chips Act last week, based on the first compromise drafted by the outgoing French presidency. The new text will be discussed with representatives from other member states at a technical meeting on Friday (8 July).

Scope

The compromise text expands the scope of the Chips Act by introducing the improvement of the sustainability and climate impact of next-generation chips in the objectives of the legislation. Similarly, the Integrated Production Facilities and Open EU Foundries will have to contribute to the green transition.

The proposal also refined the scope in terms of quantum chips, which now includes the development of libraries for quantum chips, pilot lines for integrating quantum circuits and testing facilities for advanced quantum components.

First-of-a-kind

The legislation provides privileges to ‘first-of-a-kind facilities’, which are intended “to bring an innovative element to the internal market regarding the manufacturing processes or the final product”.

These innovation elements have been expanded to include a new technology node, substrate material or innovative approaches in computing power, energy efficiency, security, safety or the integration of new functionality such as AI or memory capacity.

Innovation might also entail integrating more efficient processes, for instance, in packaging and assembly of the semiconductor, as well as lowering the environmental impact by reducing the resource inputs or increasing the recyclability of materials.

Integrated Production Facilities or Open EU Foundries

First-of-a-kind facilities can take the form of integrated Production Facilities and Open EU Foundries, which might not necessarily require a new production site but also the upgrade of an existing one.

For the Czech presidency, the project should be based on a commitment to invest in the EU to ensure “continued innovation with a view to achieving concrete advances in technology or preparing next-generation technologies”.

This more long-term approach is reflected in the fact that the Czechs want the business plan submitted for the application period to cover the project’s entire lifetime and not just the amortisation period.

European Chips Infrastructure Consortium

These facilities might be set up by public-private consortia with their legal basis in one EU country, which will have jurisdiction except in cases where EU law prevails.

The function of the ECICs will be based on statutes that will have to define the scope, conditions and procedures for changes in membership, membership contributions (that can also be provided in-kind), legal status, role and voting rights of the members.

Other member states and public or private actors might join the consortia based on fair and reasonable terms specified in the statutes. Member states might decide not to provide a financial contribution and only participate as observers without voting rights.

A new article has been added on the liquidation process of the ECIC, following a decision of its members. The hosting country’s insolvency rules apply if the consortium cannot repay its debts, with the financial liability distributed among the members based on their contributions.

Competency centres

The role of the competency centres has been expanded to help stakeholders such as start-ups and SMEs find investors. They will work in synergy with the European Digital Innovation Hubs, which might become competency centres as long as they do not receive double funding.

The procedures for establishing competency centres have been moved from the Commission to the Chips Joint Undertaking work programme. At the same time, the undertaking will also be responsible for selecting the centres.

Monitoring and crisis response

The Czech presidency wants to involve national authorities in the monitoring mechanism, as they will be able to send voluntary requests for information to all actors involved in the semiconductor value chain and other relevant stakeholders established in their national territory.

At the same time, the European Commission will have to define the frequency of the monitoring in consultation with the European Semiconductor Board and coordinate collecting information from national authorities. The EU executive will have to provide standardised and secure tools for information sharing.

The Commission will develop the list of early warning indicators in cooperation with the Board, composed of member state representatives. The list will be made public and reviewed at least every two years.

The Commission will be able to activate the crisis mechanism after consulting with the Board and in cases of severe disruptions that would prevent “the supply, repair and maintenance of essential products used by critical sectors”.

Fines

Fines for providing incomplete information have been lowered for SMEs from €300,000 to €50,000. For the failure to prioritise crisis-relevant products, the period penalty has been reduced for SMEs from 1.5% to 0.5% of the average daily turnover.

[Edited by Zoran Radosavljevic]

Source: Euractiv.com