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The European semiconductor industry can become a fundamental tool to power the innovation process while achieving social objectives. Today, it appears clearly that semiconductors, the key element behind modern technology and future developments in areas such as artificial intelligence, are crucial for Europe’s digital competitiveness. Still, Europe’s semiconductor industry faces great challenges that have significant social implications for the whole European Union as well as for its member states’ economies. We should take note of the industry’s impact on society and the considerations needed for a sustainable and successful future for all European citizens.

Our continent possesses a strong foundation in semiconductor research and development, as in Europe there could be world-class universities and research institutes that keep pace with current innovations and state-of-the-art achievements in the sector. However, translating these ideas into large-scale manufacturing has been a hurdle at the EU level as well as at the national level. The semiconductor industry is in fact dominated by Asian giants, with US companies trying to maintain a sufficient pace not to be truncated out of the race. In such a dynamic, European actors in the sector and the EU as a commercial entity found themselves vulnerable to supply chain disruptions and geopolitical tensions. Just in the last few years, we experienced the global consequences of the COVID-19 pandemic, which exposed this weakness, causing chip shortages that crippled various sectors.

Brussels will now enact the European Chips Act, a program that aims to address this vulnerability by investing in research, innovation, and infrastructure. The ambitious EU plan seeks to secure a 20% global market share for Europe in semiconductors by 2030. This target has obvious positive social implications because a dynamic domestic chip industry can help create high-skilled jobs in engineering, design, and manufacturing in all the EU member states. This, in turn, can boost economic growth and innovation across various sectors that rely on chips, from consumer electronics to healthcare, with the aim of further enlarging this scheme and introducing new industries in such a commercial blueprint.

At the same time, ensuring a socially responsible future for the European chip industry requires careful consideration. The main concern is the potential widening of the digital divide among companies, which will also affect EU citizens. A focus on advanced chip production might neglect the need for more affordable, readily available tools for low-end devices, exacerbating the gap between those who have access to advanced technology and those who don’t. Then there is the potential environmental impact of the semiconductor industry, as we are already aware of the significant resources needed for chip manufacturing and the issue related to the generation of dangerous waste. Sure, the European Chips Act acknowledges this and tries to emphasize sustainable practices in the industry, because integrating sustainability into the production process is crucial to ensuring the cleanest possible environment for future generations.

Another relevant issue is one related to the working conditions of the people employed in the semiconductor industry. The vast investments in the sector shouldn’t come at the cost of worker exploitation, especially in the poorer countries of the EU. It is important that fair wages, safe working environments, and opportunities for professional development are assured in the whole European Union. These elements are also essential for attracting and retaining talent within the EU.

In the next five years, with the new legislation beginning in July, the European Union can find a way to leverage its strengths in research and regulation to address the above-mentioned social considerations. One way to do it is to promote public funding for research that can be directed towards developing sustainable chip production methods and affordable solutions for the industry.

Written by: Francesco Marino