China’s legacy chip buildout: A new EU strategic dependency that needs de-risking?

Older generations of semi-conductors, or "legacy chips", are now at the heart of the geopolitical rivalry between the US and China. The EU is worried about becoming too dependent on such chips from China, which are crucial for a wide range of sectors. The key issue is not overcapacity, but rather strategic importance. In this new UI Brief, Tim Rühlig argues that the EU should shift its focus from "protect" to combine it with "promote" and "partner" strategies. This means maintaining a strong global market share for European chip-makers, which includes ensuring access to the Chinese market. Additionally, the EU should diversify and expand the global supply of legacy chips by investing in third countries. Finally, it should bolster European technological strengths where they exist.