New Chips Act risks state aid race

Here are the main points in the Confederation of Swedish Enterprise’s view and analysis of the European Chips Act.

• The Confederation of Swedish Enterprise rejects the proposal for a Regulation establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips Act)
• The proposal has not been subject to any impact assessment by the European Commission. The Council and the European Parliament should work to ensure that the need for new EU legislation in this area is first reviewed in more depth, before moving on with negotiations
• Semiconductors are an important input for many businesses. New investment in research and development in the field of semiconductors is welcome. However, in many respects, the Commission’s proposals result in such negative effects that the implementation of the proposal is not justified; substantial state aid that risks distorting competition; regulations that restrict the business freedoms; and the risk of an increased administrative burden
• There is also a key issue of principle: if public intervention and control to the extent that is now being proposed is accepted, there is a risk that additional inputs/production types are considered so important that the same approach can also be justified for them. Free, well-functioning, and dynamic markets risk becoming more limited and rigid. Increased support for and restrictions on production could also contribute to a “state aid race” and to increased barriers to trade