US and EU want to avoid 'subsidy race' over chip manufacturing

Intel Core i7-10700K
Intel Core i7-10700K (Image credit: Rich Edmonds / Windows Central)

What you need to know

  • The U.S. government and EU will announce a joint effort to prevent a "subsidy race" in the semiconductor industry.
  • The move could help prevent countries from competing in semiconductor manufacturing rather than addressing the global chip shortage.
  • The governments aim to ensure a supply of semiconductors in a "coordinated fashion," according to an official.

The U.S. government and the European Union will take steps to avoid a "subsidy race," according to a report by Reuters. The outlet stated that the U.S. and EU will announce a joint effort at the second meeting of the U.S.-EU Trade and Technology Council, which will occur on Monday, May 16, 2022.

"You'll see us announce... a transatlantic approach to semiconductor investments aimed at ensuring security of supply" said a senior administration official.

The joint effort will be made to prevent a subsidy race that would see countries compete for chip manufacturing.

The ongoing global chip shortage has caused supply issues across a range of industries. Several governments and large companies have committed to investing millions of dollars to alleviate the shortage. Without cooperation, however, countries could end up competing rather than focusing on fixing a global issue.

An official told Reuters and other reports that the EU and the U.S. government want to promote chip investment in a "coordinated fashion" and that they don't want to "encourage a subsidy race."

The U.S. government is considering a $52 billion funding bill for chip manufacturing, but it has not passed through Congress. The proposed European Chips Act could also see significant funding put toward chip production.

At the same meeting, the governments will announce an early warning system to identify and address supply chain disruptions in the semiconductor industry, according to the report.

Secretary of State Antony Blinken, Commerce Department Secretary Gina Raimondo, and U.S. Trade Representative Katherine Tai will headline the event. An official also told Reuters that EU trade chief Valdis Dombrovskis and EU antitrust chief Margrethe Vestager will participate.

Sean Endicott
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Sean Endicott brings nearly a decade of experience covering Microsoft and Windows news to Windows Central. He joined our team in 2017 as an app reviewer and now heads up our day-to-day news coverage. If you have a news tip or an app to review, hit him up at