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Europe’s digital future needs the private sector

Pat Gelsinger is the CEO of Intel.

“There is no digital without chips,” European Commission President Ursula von der Leyen said — and she was right.

As cars are being transformed into computers on wheels, and consumer appliances have turned into intelligent, connected devices, all of our new trends and gadgets have one thing in common: They rely on high-tech semiconductors.

This week, the Commission unveiled a bold and ambitious plan for these tiny products that are pivotal for the digital revolution sweeping across the world’s industries: the EU Chips Act.

Empowering private companies and governments to work hand-in-hand to radically advance Europe’s position in the semiconductor sector, the initiative aims to boost the Continent’s world-leading research and design capabilities and bring cutting-edge manufacturing to the region. And the private sector plans to play an essential part in making this happen.

The EU Chips Act is a historic chance to regain lost ground. The recent chips shortage has reminded us of the risks of being too dependent on one region in the short term. While Europe is home to many of the world’s great innovation companies, its once powerful role in semiconductor manufacturing has diminished. Today, 80 percent of microchips are produced in Asia.

But Europe has already proven it can drive continent-wide innovation programs when it matters. Almost two decades ago, the Galileo program created a European satellite system for global navigation. Today, more than 2 billion smartphones worldwide are Galileo-enabled, and through this program, Europe avoided being dependent on a system it doesn’t control.

All this was achieved through an alliance of policymakers, research and development (R&D) clusters, and private industry. And a similar alliance will now help rebuild a state-of-the-art European chip industry that includes not only more factories but all parts of the ecosystem.

In this ecosystem, private-sector investments will be a catalyst for innovation. Intel’s planned investments, as well as those of other industry leaders, will boost innovation and stipulate further investments along the entire European chips value chain.

Europe is already home to leading universities, research institutions and innovators across sectors including automotive, engineering, energy and telecommunications. But so far, their fundamental research and knowledge has been brought to life in other parts of the world. Full-scale investment in R&D and partnerships with European institutions would help bring this circle of innovation back home.

Further, such investments would create tens of thousands of jobs and additional economic benefits throughout the EU economy. A.T. Kearney, a consultancy, forecasts that the economic impact of an advanced chip factory amounts to twice the initial investment. For example, the initial phase of such an operation would provide more than 3,000 high-tech, high-wage jobs and 7,000 construction jobs. They also estimate that the multiplier effect through partners and suppliers can create an additional 14,000 to 17,000 jobs, while retaining and attracting a new generation of talent.

Private sector investments will also support the green transition and help deliver the European Green Deal, as more efficient, leading-edge chips can reduce the power consumption of the next wave of digital hardware.

For Intel, specifically, all this simply means continuing our long-standing commitment to Europe, as we propose a once-in-a-generation investment of as much as €80 billion over the next decade, helping to build the digital capabilities and capacities for Europe to succeed in the digital future.

I was born and raised in Pennsylvania, and I have seen cities with thriving steel mills wane in importance as the economy evolved, only to resurge thanks to smart investments in technology and innovation.

Europe’s Digital Compass points the way forward for the EU to thrive and lead in targeted, sustainable, digital industries like chip-making. The industry is poised and ready to do its part, but we cannot build a competitive ecosystem for leading-edge chips on our own.

When it comes to chips, the path forward is clear. Joining forces between governments and industry will act as a magnet for further investments in innovation, economies and communities across Europe. And I am convinced we can initiate a leap forward for Europe through this combination of co-investment and innovation.

To once again quote von der Leyen, “Let’s be bold again, this time with semiconductors.” Together, we can shape Europe’s digital future for decades to come.

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