EUROPEAN CHIP INTERDEPENDENCE

Abstract

This thesis examines how the European Union (EU) could build a strategic dependence within the global semiconductor sector. This is due to of rising geopolitical tensions and protectionism between nations. The study analysis aims to determine whether the EU can build or strengthen a specific segment of the semiconductor value chain that is hard to substitute. This way, creating a leveraged position for the union in trade relations and a form of interdependence with other global actors. The study uses a qualitative content analysis with a deductive approach. The material consists of the European regulation called the Chips act, industry organisations position papers, and a report done by the OECD (Organisation for Economic Co-operation and Development). The sources are analysed through an analysis scheme. The findings show a mismatch between the EU’s goals and the industry’s recommendations, as well as OECD’s breakdown. Further, full chip autonomy is several times shut down as a nonsensical idea. Instead, the focus is on the EU developing specific segments of the value chain where it holds a comparative advantage. It is this study's opinion that these segments are manufacturing equipment, automotive and industrial chips and emerging AI technologies. It is this thesis opinion that the EU could build a strategic dependency, through selective control over specific segments of the value chain, with the use of the right policy support.