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EU plans $6.4 billion effort to boost chip manufacturing

The European Commission is spending 5 billion euros to coordinate and advance the processor industry in Europe. The goal: a fifth of worldwide manufacturing.

Neelie Kroes, vice president of the European Commission, speaking at LeWeb 2012.
Neelie Kroes, vice president of the European Commission, speaking at LeWeb 2012.
Stephen Shankland/CNET

The European Commission announced plans to spend 5 billion euros ($6.4 million) over the next seven years to try to spur microprocessor manufacturing in the European Union.

The funds, which the EC said will be matched by the same amount coming from the private sector, are designed to enable Europe to double its share of chip manufacturing and thereby help other industrial sectors that are embracing electronics.

"I want to double our chip production to around 20 percent of global production. I want Europe to produce more chips in Europe than the United States produces domestically," said Neelie Kroes, vice president of the EC's Digital Agenda, in an announcement Thursday. "It's a realistic goal if we channel our investments properly."

The funds will go toward improving chip performance and toward lowering their cost by shifting chipmaking to 450mm silicon wafers. Today's chips are usually built from 300mm wafers, but the larger wafers can lower per-chip costs -- once capital investments are made in upgrading chip manufacturing equipment.

The work also will try to concentrate some work at three "clusters": Dresden in Germany, Grenoble in France, and the pairing of Eindhoven in the Netherlands and Leuven in Belgium. The project aims to better coordinate various research and development, too.

Although Kroes highlighted mobile phones as an example of the important areas where chipmaking is important, but she argued that computing technology is spreading more broadly.

"This isn't about computers -- I can't stress that enough," Kroes said in a speech Thursday. "From communications to health care, energy to transport, every sector of our economy, every challenge of our society, can use and benefit from electronic innovations."