Europe "suffers" from technological dependence on China - Recorded a 9.8 billion euro deficit with Beijing for microchips
European Union auditors have warned that the bloc is dangerously dependent on China for key microchips that power everything from cars to washing machines.
One in three low-tech chips comes from China, the European Court of Auditors (ECA) said in a report. The institution warned that the EU is “not even close” to meeting its goal of achieving 20 percent of the global value chain for microchips by 2030. The target, set in the 2023 European Chips Act, was intended to make the bloc less dependent on foreign regions.
The report is another sign that the EU is failing to reduce some of its most glaring dependencies on foreign technology for critical and essential services, despite Brussels' efforts to make the bloc more "technologically sovereign."
Europe has several major companies in the less advanced microchip field, including Germany's Infineon, the Netherlands' NXP and Franco-Italian STMicroelectronics. These firms serve the needs of Europe's powerful car industry.
But the auditors wrote that demand in Europe is “currently growing faster than EU-based chipmakers can supply it.” In 2024, the Union had a deficit of 9.8 billion euros with China for chips. The bloc also recorded deficits with other manufacturing hubs such as Taiwan.
According to the report, the gap that Europe has with other regions will continue to widen. "Since this type of microchip is needed for technology related to the green transition, this trade deficit is likely to increase in the future," the authors explain.
The auditors' message comes as Brussels prepares to review its Chip Act, which set a target of 20 percent by 2030. The financial watchdogs dismissed the goal as "aspirational" and not based on reality. Last July, the Commission admitted the target was far from achievable, predicting the EU would reach 11.7 percent by 2030, instead of 20 percent.
The EU executive has been investigating the bloc's dependence on China for low-tech chips. Last year, the institution surveyed microchip suppliers and their customers about older-generation technology used in cars, household appliances and medical devices, amid fears that Chinese-subsidized firms were harming them.
This move was coordinated with Washington under then-President Joe Biden, who conducted a similar survey. But geopolitical tensions between the US and the EU have made the issue of reducing dependencies even more urgent than a year ago.
"We already know the risks that come with importing from countries with which we have an uncertain relationship. But we probably can't rely on our traditional allies for chip supplies either," the watchdogs point out.
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