Curbing china's legacy chip clout : reevaluating EU strategy

The EU is concerned that it could soon become overly reliant on legacy chips from China. Legacy chips are of strategic importance as they are irreplaceable in a wide range of critical industrial sectors. The challenge poses a threat to the EU's economic security, as China could exploit this dependency to exert influence. Chinese chipmakers benefit from favourable domestic conditions and localisation trends combined with a specific business model. But Chinese supply effectively meets real demand and does not reflect overcapacity. This has concrete policy consequences. In line with the three-pillar approach outlined in the 2023 Economic Security Strategy, the EU's focus should shift from predominantly protective measures towards promoting the bloc's competitiveness and partnering with a diverse range of countries to build resilience against economic security risks.