Europe’s Chip Subsidies Will Face Tough Scrutiny, Vestager Warns

(Bloomberg) -- Potential subsidies to help Europe expand its semiconductor industry will face tough scrutiny from European Union regulators, the region’s antitrust chief Margrethe Vestager warned.

Although the EU has opened the door for more government handouts to tackle chip shortages, Vestager said “strong safeguards” are needed “to make sure that such state aid is necessary, appropriate, proportionate,” she told reporters at a Brussels press conference.

“The commission will consider approving support to fill possible funding gaps in the semiconductor ecosystem, in particular for European first-of-a-kind facilities” that can cover chips and other processes in producing them, she added. “We cannot rely on one country or one company.”

Vestager’s words come after Thierry Breton, the European Commission’s internal market chief, called for the EU should grab the chance to become a global powerhouse for chips as Intel Corp. chases European support to help build more local chip capacity. European leaders have called for more investment to alleviate a supply shortage that’s rippled through several industries.

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