EU pledges €4.8B to boost electronics sector

Digital Agenda Commissioner calls for chip production to double

In a new effort to boost Europe's electronics manufacturing capabilities, the European Commission on Wednesday proposed €4.8 billion (US$6.2 billion) in funding for research and innovation partnerships with the private sector and European Union countries.

The Commission hopes the public-private partnerships under the planned Joint Technology Initiative (JTI) will reverse the decline of the E.U.'s global share in the electronic components and systems market. Digital Agenda Commissioner Neelie Kroes wants to double Europe's chip production by 2020 and overtake the U.S.

The plans should also help meet the E.U. target of 20 percent of GDP coming from manufacturing by 2020, particularly through work in areas such as embedded systems, semiconductor equipment and materials supply and the design of complex electronic systems.

After a competitive call, the best projects will be selected for funding through peer review. The JTI will set out seven-year commitments and establish a strategic research and innovation agenda for all those involved -- companies, universities, research laboratories, innovative small and medium businesses or other groups.

The electronics JTI is expected to start in early 2014 and to run for 10 years. It will be a merger of three current initiatives: ARTEMIS (embedded/cyber-physical systems), AENEAS (nanoelectronics), both set up in 2008, and EPoSS (smart integrated systems).

The current initiatives have been successful in jump-starting five manufacturing pilot lines valued at €730 million in nanoelectronics and ARTEMIS's first launch of two large-scale innovation pilot projects valued at €150 million.

According to the Commission, the electronics sector has grown at about 5 percent per year since 2000. In Europe today it directly employs 200,000 people.

"But it's not just about this one sector," said Kroes in a statement. "It's about every sector enabled and stimulated by new electronic innovations. You've probably got a good example in your pocket; but it's not just phones, it's all sorts of gadgets. The fact is, electronics supports and enables a huge value chain, reaching across the economy."

Therefore, a public-public partnership between the European Commission and E.U. member states focused on support for high-tech small or medium-size enterprises (SMEs) was also proposed Wednesday. The Eurostars program is for SMEs that dedicate at least 10 percent of their turnover or full-time equivalent to research activities.

The total E.U. contribution will be up to €1.2 billion from the Horizon 2020 fund, matched by contributions from E.U. countries. The industrial partners will contribute at least half of the total costs -- about €2.4 billion.

The proposals now need to be approved by the Council of the E.U. and the European Parliament.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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