Representatives of the EU institutions are scheduled to discuss a compromise text on Friday, March 17th, which outlines the mechanism for monitoring and responding to the semiconductor

supply crisis in the upcoming Chips Act. The Chips Act is a legislative proposal aimed at boosting the EU's semiconductor capacity, with the proposed Pillar III specifically setting up a mechanism for preventing and managing semiconductor shortages.

Currently in the last phase of the legislative process, the European Parliament, Council, and Commission are set to meet in trilogues to reach a final agreement on the legislation.

Ahead of the leading parliamentary committee adopting its position on the Chips Act next week, EURACTIV has provided an overview of the main changes that have been proposed.

One significant change is the introduction of the principle that crisis management should be based on a long-term strategic mapping that the European Commission must conduct in consultation with national authorities and business representatives. This exercise would identify early warning indicators that would trigger the crisis stage, with relevant industry stakeholders invited to provide input to help define such a mechanism. The compromise maintains that the information requests should be voluntary and through available data that is not commercially sensitive.

The competent national authorities would be responsible for identifying key market actors established on their national territory that play a critical role in the semiconductor supply chain, while the EU executive would identify the critical actors at the global level. The Commission would limit its participation in this mapping and leave industry stakeholders out of the discussions on monitoring, prolonging, and terminating the crisis stage.

The Commission and the competent national authorities would be responsible for informing each other if they have reliable information about the risks of severe disruptions in the supply of chips. An extraordinary meeting of the European Semiconductor Board would be convened to discuss the severity of the disruptions and whether activating the crisis stage would be appropriate, initiating preventive joint purchases of semiconductors, intermediate products, or raw materials.

In addition, the Commission would consult relevant third countries to seek solutions to the disruptions, while national authorities would be asked to assess their key actors' preparedness and critical entities' preparedness.

Overall, the proposed changes aim to create a robust system for managing and preventing semiconductor shortages, which are increasingly becoming a concern in industries worldwide. The Chips Act is expected to help the EU become more self-sufficient in semiconductor production, positioning it as a major player in the semiconductor industry and reducing its reliance on imports.