Leaders called for greater trans-Atlantic collaboration between the U.S. and European Union to secure chips and rare materials amid worries China could invade Taiwan and cut off access to them.
“If all the chips built in Taiwan were suddenly cut off, it would be an economic catastrophe,” said Sen. Mark Warner, D-Virginia, in an online discussion held Wednesday with Thierry Breton, European Commissioner for the internal market.
Warner co-authored the $52 billion U.S. CHIPS Act and chairs the Senate Intel Committee, while Breton is backing a similar CHIPS Act to bring more fabs and research to Europe. The discussion was moderated by Eva Maydell, member of European Parliament.
Breton said he hoped the EU and US could boost chip production to 40% of the world’s output in a decade, while Warner said he hoped for a higher percentage. The current contribution by the U.S., is about 12%, while Breton said Europe contributes about 10%, down for about 40% for each two decades ago.
“The 40% goal should be a minimum,” Warner said, while praising the EU for moving “aggressively and quickly” to put forward an EU Chips act that he said had helpied spur the US Senate into action on the US Chips Act. “That activity spurred our sometimes slow political system,” Warner said.
Breton said an alliance may already exist between some semiconductor companies in Europe, the US and Asia that could be able to circumvent any aggressive action by China to move against Taiwan and threaten the chip supply from major supplier TSMC and others in Taiwan. He mentioned chip equipment maker ASML based in the Netherlands potentially working with Intel and others.
Warner said he has been concerned by reports the Chinese may be buying and stockpiling cutting edge tools from ASML and others and paying premiums to gain access to the equipment that could leave the US and Europe “cut off” from that tool equipment. Warner has long been concerned about Chinese practices of stealing intellectual property from the US and Europe and the creation of Chinese law in 2016 to require Chinese companies to be responsible to the Chinese Communist Party and not a company’s investors.
“My concern is with the Chinese Party and President Xi and not the Chinese people,” he said.
The two men also briefly mentioned ways the US and EU could collaborate on protecting raw materials used in making chips, solar panels and electric vehicle batteries. “We know Russia and China have increasing influence in raw materials,” Warner said. Pemitting reform is needed not only to protect where materials such as cobalt is mined but where and how it is processed.
Warner said a better common language is also needed to describe the needs of democracies such as the EU countries and US with other countries, including many in Africa, that may wish to be part of an alliance opposed to autocracies even if they are not considered democracies. Maydell had framed the online discussion as how like-minded partners can ensure the next generation of chips is a market dominated by democracies and not autocracies.
He suggested an appropriate label might be to refer to the “free world as we talk about building an alliance of countries on how we build technology and…new standards and make sure technology is not picked up by the autocracies of the world.”
Breton said Europe and the US “have been too naïve. It’s extremely important to coordinate…It’s extremely important to have reciprocity and work together.”
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