US, EU announce plan to boost chip production

US, EU announce plan to boost chip production

The United States and the European Union have agreed on Monday a joint effort to boost microchip manufacturing and combat Russian disinformation about the war in Ukraine.

The two sides met outside Paris as part of the Trade and Technology Council TTC, a forum created last year to counter China's increasingly powerful position in the technology sector.

The EU and US officials have accused Moscow of being an all-out attack on the truth, accusing Moscow of trying to blame Western sanctions for food shortages in Asia and Africa.

EU competition commissioner Margrethe Vestager said at a press conference in Saclay, a technology hub south of Paris, that the Russian invasion is spreading across the world.

The TTC, which held its first meeting in Pittsburgh last September, has working groups that cover issues from Artificial Intelligence to export controls, as well as other practical actions that could include funding or other support to promote access to trustworthy and fact-based information.

Officials said that their work had already undermined Russia's war effort by limiting exports of advanced technology in aerospace and cyber-surveillance.

Although Russia is the main focus, several of the council's goals are aimed at China.

The TTC is trying to calm the two-year supply chain crisis in the chip industry, where China is a major global player.

There is a surge in demand for electronic gadgets during the pandemic, which is linked to the global supply chain crunch.

The EU and US officials pledged to give the chip industry the maximum possible subsidies but said they wanted to invest in a coordinated way to avoid subsidy races. The forum also announced an early warning system that would highlight the disruptions in the supply of semiconductor materials like silicon that form the basis of chips.

One US official said that the US already has an early warning system that helped us get ahead of a couple of potential shutdowns earlier this year.

The official said that the two sides were already looking ahead to supply disruptions caused by the pandemic lockdowns in China -- the only major economy still hewing to a zero-Covid strategy.

A long-running shortage of rare earth elements is a concern, which is vital for the manufacture of products, including electric vehicles.

The forum's final statement highlighted that EU and US companies did not have prominent positions in the supply chain for rare earths.

The statement said that nearly all of the production stages are concentrated in China, in one of only a handful of direct mentions of China.

Both the US and EU pledged to take utmost care to avoid unnecessary obstacles to trade across the Atlantic Ocean, as they praised their efforts to increase capacity to procure and process these elements.

Russia's war has given the TTC a wider role than originally anticipated, but US Trade Representative Katherine Tai claimed that the forum had shown agility in adapting to what she described as a challenge to the whole logic of globalisation.

She told reporters that the invasion results in a shrinking pie not only for Russia, Ukraine or the EU, but for the whole world.