Luxembourg’s Autofestival was impacted by the worldwide shortage of semiconductor chips. Copyright (c) 2019 Blue Andy/Shutterstock. No use without permission.

Luxembourg’s Autofestival was impacted by the worldwide shortage of semiconductor chips. Copyright (c) 2019 Blue Andy/Shutterstock. No use without permission.

On Tuesday, European commissioner for the internal market Thierry Breton proposed a comprehensive set of measures to ensure the EU's security of supply in semiconductor technologies and applications. The European Chips Act will see some €43 billion in public and private investments aimed at turbocharging the EU’s digital revolution and mobile-based digital identity. Luxembourg wants to lead the charge.

Currently there is “extreme global dependency of the semiconductor value chain on a very limited number of actors in a complex geopolitical context,” notes the European commission.

Chips, also known as semiconductors limit or expand the potential for countries to act militarily, economically or industrially.

Taiwan, China, and South Korea combine for roughly 87% market share in the fabrication or production of chips.

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The European Chips Act aims to put this to an end and “ensure that the EU has the necessary tools, skills and technological capabilities to become a leader in this field…to secure its supply of semiconductors and to reduce its dependencies,” says the commission.

The EU aims to double its market share to 20% by 2030 and quadruple the production of chips on the European continent.

More precisely, the plan will fund research and development efforts, and €30bn will be used for public investments, especially state aid. This is expected to test the rules around state aid to the absolute limit. There is particular concern among liberal commissioners and member states.

Europe is also thinking about creating a €5bn fund to support start-ups.

Digital transformation

With the adoption of 5G devices and other new technologies, chips have been in high demand. Chips are strategic assets for key industrial value chains, especially with the digital transformation currently taking place in the EU.

The act will enable the EU to turbocharge mobile-based digital identity and digital transformation. The executive wants to build a framework, with the aim that at least 80 % of citizens across the union use a digital identity to access key public services by 2030.

In 2020, Idemia and Sopra Steria were awarded the contract to build the new shared biometric matching system (sBMS). The company is set to lead on what it calls “establishing biometric data driven augmented identity.”

The contract was awarded by eu-LISA the digital hub agency of the Schengen area, which is tasked with implementing and managing the main centralised databases for migration control and security purposes.

Between 2014-2020 eu-LISA has spent €1.5bn on contracts with the private sector, with €500m going to five companies whose subsidiaries are based in Luxembourg.

- Intrasoft International SA

- European Dynamics Luxembourg SA

- ARHS Developments SA

- Sword Technologies

- Infeurope SA

The University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust (SnT) and the digitalisation ministry aiming to accelerate the public administration’s digitalisation.

The digital identities project will aim to position Luxembourg as a digital frontrunner in the European Union.

The resulting project—titled digital identities for Luxembourg--will explore the possible use of digital identity documents and digital wallets.