Tim Rühlig
Introduction
Legacy chips have taken centre stage in the geopolitical rivalry between the United States and China. The European Union is concerned that it might soon be overly reliant on legacy chips from China. Legacy chips are of strategic importance as they are irreplaceable in a wide range of applications, from the automotive sector to medical appliances or the defence and aerospace sector. The challenge is real but, contrary to a popular belief, it does not stem from overcapacity. This has concrete policy consequences. Instead of “protect” measures, the EU should focus on “promote” and “partner” tools. The EU should strive to maintain a significant global market share for European chip makers by securing access to the domestic Chinese market. Furthermore, it should promote the diversification and expansion of the global supply of legacy chips, not least by expanding European investment in third countries. Finally, it should adopt strategies to maintain European technological strengths where they exist.
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