US, EU Strengthen Alliance to Boost ‘Support’ for Global Economies: Semiconductors

The United States and the European Union on Wednesday pledged to deepen their alliance to advance common priorities such as artificial intelligence, business challenges and “supporting” global economies: semiconductors.

“Semiconductors are the physical basis of integrated circuits that are essential to modern life and underpin our economies,” the United States Council of Commerce and Technology said in a joint statement. “As such, semiconductors power virtually every sector of the economy, including energy, healthcare, agriculture, consumer electronics, manufacturing, defense and transportation. “

The council said the coronavirus pandemic has highlighted the need to increase stable and reliable supply chains for semiconductor production.

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The chip shortages began under the Trump administration, when supply chains were affected by the trade war with China. But chip shortages were further exacerbated by increased demand for electronics on everything from laptops to home healthcare during the pandemic.

“We recognize that the supply chain for semiconductors, raw materials, from design and manufacturing to assembly, testing and incorporation into end products, is extremely complex and geographically dispersed,” said the board. “The United States and the European Union have significant respective strengths as well as significant and continuing mutual dependencies and common external dependencies.”

Secretary of State Antony Blinken and Secretary of Commerce Gina Raimondo traveled to Pittsburgh to meet with European Commission Executive Vice Presidents Valdis Dombrovskis and Margrethe Vestager to strengthen ties, as relations between the United States and Europe have become tense.

EU Internal Market Commissioner Thierry Breton warned last week that there was a growing sense that the US-Transatlantic relationship was “broken” and suggested it was time to “pause and reset” the partnership.

Breton’s comments came after France was sidelined from a US-UK deal with Australia that effectively canceled an existing submarine contract with the EU country.

The commissioner was not present at Wednesday’s council meeting in Pittsburgh, but his social media suggested Breton was working to expand the EU’s reach in the global chip market.

On Wednesday, Breton announced on Twitter that he was in Japan to facilitate EU-Japan “cooperation” and prepare the “ground for our next EU Chip Act”.

The United States has also sought to strengthen this alliance with Japan and support semiconductor production.

Common US and EU interest in Japan could signal an increased push to distance itself from China.

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The council pledged to “stand in solidarity” against “unfair behavior by state-owned enterprises,” although the statement does not directly identify China.

“We intend to focus on reducing existing strategic dependencies along the supply chain, including through supply chain diversification and increased investment,” the board said, adding that they “would work jointly so that any investment made in our territories is made in its entirety. Respect for our respective security of supply.”