The European Chips Act represents a groundbreaking initiative aimed at bolstering Europe’s semiconductor sector, which is critical for everything from smart devices to electric vehicles. As the world becomes increasingly dependent on technology, the role of semiconductors has never been more pivotal. Recognizing this, the European Union (EU) has set forth a strategic plan to enhance its position in the global semiconductor landscape. At the heart of this strategy lies the concept of Pilot Lines – dedicated facilities designed to foster innovation and streamline the production of cutting-edge semiconductor technologies.

The EU Chips Act represents the answer of the European Union to two major societal challenges. One is the need for more strategic autonomy, to reinforce EU’s ability to set its own course amidst shifting global dynamics. The other challenge is the green & digital twin transition. In this transition, the pace of digitalization accelerates, and green sustainable developments become the norm to limit climate change. Moreover, both parts of the transition are mutually related. Digital technologies drive the green transition, and this digitalization process must be performed in the most sustainable way. The semiconductor industry, through its enabling technologies and strategic significance, holds the key to EU’s success in these societal challenges.

There are two consequences of the digital & green twin transition. One is the electrification of industries and transport, taking distance from carbon-rich energy resources like oil, gas and coal. The supply to the energy grid changes due to the increased volumes of solar and wind energy. Simultaneously, demand for electricity increases. Handling these novel intensified voltages requires more versatile power systems and grids. The second consequence is that connectivity and data volumes increase rapidly. More data is manipulated and communicated consistently, from consumer electronics like phones and transportation like autonomous-driven vehicles to automated factory lines.

Within the semiconductor industry, the value chain involved in designing, developing, and manufacturing power devices – or power chips – operates at the crossroads of digital and green application areas. Power chip refers to a semiconductor device designed specifically for power management and control applications, typically used in power electronics circuits for efficient energy conversion and regulation. As such, it plays a key role in the electrification of industry and transport. To meet society’s demand following the twin transition, the value chain for power chips focuses on improving energy efficiency and reducing cost.