Proposal for a COUNCIL REGULATION amending Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe, as regards the Chips Joint Undertaking
Date: 2022-02-08
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: EU initiative, EU production, European Joint Undertaking, Framework Programme for Research and Development, advanced technology industry, digital technology, electronic component, innovation, research and development

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   EUROPEAN COMMISSION  Brussels, 8.2.2022  COM(2022) 47 final 2022/0033 (NLE)  Proposal for a COUNCIL REGULATION amending Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe, as regards the Chips Joint Undertaking (Text with EEA relevance)  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This  explanatory  memorandum  accompanies  the  proposal  for  a  Council  Regulation 
amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under 
Horizon Europe.  

This  proposal  complements  the  proposal  for  a  Regulation  of  the  European  Parliament  and 
Council  establishing  a  framework  of  measures  for  strengthening  Europe’s  semiconductor 
ecosystem (‘Chips Act’)1 by implementing most of the actions foreseen under the Chips for 
Europe Initiative, set up under the Chips Act proposal.  

The  Chips  Act  proposal  delivers  on  the  political  commitment  by  President  von  der  Leyen, 
who announced in her 2021 State of the Union speech that the aim is to jointly create a state-
of-the-art  European  chip  ecosystem,  including  production2.  The  Chips  Act  proposal’s 
underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained 
in its accompanying Communication.3 

To  fulfil  this  vision,  the  European  Chips  Strategy  is  articulated  around  five  strategic 
objectives: 

 

 

 

 

 

Europe should strengthen its research and technology leadership; 

Europe  should  build  and  reinforce  its  own  capacity  to  innovate  in  the  design, 
manufacturing,  and  packaging  of  advanced  chips,  and  turn  them  into  commercial 
products;  

Europe  should  put  in  place  an  adequate  framework  to  increase  substantially  its 
production capacity by 2030; 

Europe  should  address  the  acute  skills  shortage,  attract  new  talent,  and  support  the 
emergence of a skilled workforce; 

Europe  should  develop  an  in-depth  understanding  of  global  semiconductor  supply 
chains.  

The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of 
Europe’s  semiconductor  ecosystem  and  increasing  its  global  market  share.  It  also  aims  at 
facilitating  early  adoption  of  new  chips  by  European 
its 
competitiveness.  For  this,  it  needs  to  attract  investment  in  innovative  production  facilities, 
have a skilled workforce, but also be in the position to design and produce the most advanced 
chips  that  will  define  the  markets  of  tomorrow,  developing  capabilities  and  having  the 
possibility to test and prototype innovative designs through pilot lines in close collaboration 
with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe 
has the analytical capability of increasing the transparency of the value chain and is capable to 
benefit from increased capacity to serve the common interest of the single market in case of 
crisis.  The objective is  not  to  become self-sufficient,  which is  not  an achievable target.  The 

industry  and 

increase 

1  COM(2022) 46, 08.02.2022. 
2  State of the Union address 2021. https://ec.europa.eu/info/sites/default/files/soteu_2021_address_en_0.pdf  
3  COM(2022) 45, 08.02.2022.  

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Union  must  strengthen  its  strengths  and  work  with  third  countries  in  a  supply  chain  where 
interdependencies will remain strong. 

In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set 
up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building 
throughout  investment  into  cross-border  and  openly  accessible  research,  development  and 
innovation infrastructure set up in the Union to  enable the development  of cutting-edge and 
next-generation  semiconductor  technologies  that  will  reinforce  the  EU’s  advanced  design, 
systems  integration,  and  chips  production  capabilities,  including  emphasis  on  start-ups  and 
scale-ups. 

In  particular,  the  Initiative  will  build  a  virtual  design  platform  to  reinforce  Europe’s  design 
capacity,  which  will  be  accessible  on  open,  non-discriminatory,  and  transparent  terms.  The 
platform  will  stimulate  a  wide  cooperation  of  user  communities  with  design  houses, 
intellectual  property  (IP)  and  tool  suppliers,  designers,  and  research  and  technology 
organisations  (RTOs),  and  will  integrate  existing  and  new  design  facilities  with  extended 
libraries and EDA4 tools. 

The  Initiative  will  support  pilot  lines  that  provide  the  means  for  third  parties  under  open, 
transparent,  and non-discriminatory terms to test, validate, and further develop their product 
designs. The development of new pilot lines will prepare for the next generation of production 
capabilities and their validation. 

Furthermore,  the  Initiative  will  set  up  advanced  technology  and  engineering  capacities  for 
quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing 
and experimentation facilities. 

The Initiative will support a network of competence centres across Europe that will provide 
expertise  to  stakeholders,  including  end-user  small  and  medium-sized  enterprises  (SMEs), 
start-ups  as  well  as  vertical  sectors,  and  improve  their  skills.  Competence  centres  will 
facilitate open, transparent, and non-discriminatory access to and effective use of the design 
infrastructure and the pilot lines. They will become poles of attraction for innovation and for 
new, highly skilled talent, including via reskilling and upskilling of workers. 

The  actions  under  the  Initiative  will  be  primarily  implemented  through  the  Chips  Joint 
Undertaking,  i.e.  the  amended  and  renamed  current  Key  Digital  Technologies  Joint 
Undertaking5.  This  Joint  Undertaking  currently  provides  extensive  support  for  industrially 
driven research, technology development, and innovation in the area of electronic components 
and systems, and related software and systems technologies. These activities will become part 
of the Initiative.  

This  proposal  aims  to  amend  the  legal  provisions  of  the  Council  Regulation  amending 
Council  Regulation  (EU)  2021/2085  establishing  the  Joint  Undertakings  under  Horizon 
Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related 
to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint 
Undertaking”. 

4  Electronic Design Automation tools, i.e. software tools for designing integrated circuits. 
5  Regulation (EU) 2021/2085 of the Council of 19 November 2021 establishing the Joint Undertakings under 
Horizon Europe and repealing Regulations (EC) No 219/2007, (EU) No 557/2014, (EU) No 558/2014, (EU) 
No 559/2014, (EU) No 560/2014, (EU) No 561/2014 and (EU) No 642/2014, OJ L 427, 30.11.2021, p. 17. 

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• 

Consistency with existing policy provisions in the policy area 

The  Chips  JU  will  pool  resources  from  the  Union,  including  the  Horizon  Europe  and  the 
Digital  Europe  Programme,  Member  States  and  third  countries  associated  with  the  existing 
Union programmes, as well as the private sector.  

The proposal defines the actions under the Chips for Europe  Initiative that are implemented 
through  the  Chips  Joint  Undertaking.  The  proposal  complements  the  Digital  Europe 
programme6,  which  supports  digital  capacity  building  in  key  digital  domains  where 
technology  underpins  performance  gains,  notably  High  Performance 
semiconductor 
Computing,  Artificial  Intelligence,  and  Cybersecurity,  together  with  skills  development  and 
the  deployment  of  digital  innovation  hubs.  The  proposal  supports  capacity  building  to 
reinforce  advanced  research,  design,  production  and  systems  integration  capabilities  in 
cutting-edge and next-generation semiconductor technologies. The Digital Europe Programme 
contributes  to  the  Chips  JU  via  a  new  sixth  Specific  Objective,  which  will  have  a  thematic 
focus on semiconductor technologies. 
The  Chips  JU  also  builds  on  and  complements  Horizon  Europe7,  which  in  the  area  of 
semiconductors provides support for academically driven research, technology development, 
and  innovation.  The  Chips  JU  will  focus  on  supporting  investment  into  cross-border  and 
openly accessible research, development and innovation infrastructures set up in the Union to 
enable  the  development  of  semiconductor  technologies  across  Europe.  New  semiconductor 
technologies  from  research  and  innovation  actions  supported  by  Horizon  Europe  may  be 
progressively  taken  up  and  deployed  by  the  capacity  building  activities  supported  by  the 
Chips  JU.  Conversely,  the  technology  capacities  set  up  under  the  Chips  JU  will  be  made 
available to the research and innovation community, including for actions supported through 
Horizon Europe. 

• 

Consistency with other Union policies 

The proposed measures are in line with some of the main policies of the Union, such as the 
Green  Deal8.  The  application  of  semiconductor  technologies  such  as  for  power  electronics, 
and for digital technologies in general, are powerful enablers for the sustainability transition 
and can lead to new products and more efficient and effective ways of working that contribute 
to the Green Deal objectives. 

Semiconductor  supply  disruptions  and  dependencies  on  other  regions  can  slow  down  the 
sustainability transition of European sectors benefiting from digital solutions. To address the 
disruptions  and  dependencies,  the  proposal  strengthens  Europe’s  technology  and  innovation 
leadership in the semiconductor domain.  

Digital  technologies  have  their  own  environmental  footprint,  including  their  significant 
energy  consumption.  The  information  and  communications  technology  (ICT)  sector  is 

6  Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021 establishing the 

Digital Europe Programme and repealing Decision (EU) 2015/2240, OJ L 166, 11.5.2021, p. 1. 

7  Regulation  (EU)  2021/695  of  the  European  Parliament  and  of  the  Council  of  28  April  2021  establishing 
Horizon  Europe  –  the  Framework  Programme  for  Research  and  Innovation,  laying  down  its  rules  for 
participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013, OJ 
L 170, 12.5.2021, p. 1. 

8  Communication  from the  Commission to the European Parliament,  the European Council, the  Council, the 
European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions.  The  European  Green  Deal. 
COM(2019) 640, 11.12.2019. 

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responsible for 5-9% of the world’s total electricity use and more than 2% of all emissions9. 
Data centres alone accounted for 2.7% of electricity demand in 2018 in the EU and will reach 
3.21%  by  2030,  if  development  continues  on  the  current  trajectory10.  Such  energy 
consumption needs to be reduced. The proposal, and in particular via the design facilities and 
pilot lines that it supports, will lead to the design, testing, and validation of new,  low power 
processors.  Processors  are  the  core  components  of  servers  that  handle  the  computational 
workload  in  data  centres.  Larger  data  centres  contain  millions  of  such  servers  and 
improvements in the power consumption of processors can have a significant bearing on the 
overall power consumption of a data centre. Such chips with a low-energy footprint contribute 
also to positioning the EU as a leader in sustainable digital technologies.  

The  proposal  contributes  to  the  objectives  of  parts  of  the  Fit  for  55  package  that  focus  on 
promoting cleaner vehicles and fuels  in  a technologically neutral  way11. The revision of the 
CO2  emission  standards  for  new  cars  and  vans  aims  at  further  reducing  the  greenhouse  gas 
emissions  of  these  vehicles,  providing  a  clear  and  realistic  pathway  towards  zero-emission 
mobility.  Consumer  demand  for  zero  emission  vehicles,  such  as  electrically  chargeable 
vehicles,  is  increasing  already12.  Electrically  chargeable  vehicles  typically  have  more  than 
twice  the  amount  of  semiconductor  content  per  vehicle  than  cars  with  internal-combustion 
engines13. Advanced packaging technologies are increasingly important to address increasing 
power and energy-efficiency requirements by electrical vehicles. It follows that the objectives 
of the proposal are consistent with the objectives of the Fit for 55 package. 

With  digitalisation  and  electrification  increasing,  energy-efficient  chips  contribute  to  other 
policies as well, including policies on industrial manufacturing, transport, and energy, e.g. the 
upcoming  Digitalisation  of  Energy  Action  Plan14.  The  demand  for  semiconductor 
technologies is expected to double in a decade. More and more chips are embedded in robots, 
and  manufacturing  machines,  in  industry,  in  energy  and  in  agriculture,  but  also  in  transport 
vehicles and other devices. The demand of power electronics semiconductors is expected to 
increase  due  to  the  growing  penetration  of  renewables  in  the  electrical  system  and  to  the 
transition  to  electro mobility.  Via smart  use of  chips  and other digital  technologies,  and via 
more energy-efficient chips, the proposal is consistent with and contributes to several sectoral 
policies. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis  

This Regulation will amend Council Regulation (EU) 2021/2085 of 19 November 2021 that 
established nine institutionalised European partnerships based on Article 187 TFEU according 

9  Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  energy  efficiency  (recast). 

COM(2021) 558, 14.7.2021. 

10  https://digital-strategy.ec.europa.eu/en/library/energy-efficient-cloud-computing-technologies-and-policies-

eco-friendly-cloud-market 

11  Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions. 'Fit for 55': delivering the EU's 2030 Climate Target on 
the way to climate neutrality. COM(2021) 550, 14.7.2021. 

12  For instance, the share of electric cars in new sales in Europe is increasing and is expected to make up 14% in 

2021. https://think.ing.com/articles/slow-start-for-electric-vehicles-in-the-us-but-times-are-changing 
13  https://www.idtechex.com/en/research-article/ev-power-electronics-driving-semiconductor-demand-in-a-

chip-shortage/24820 

14  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13141-Digitalising-the-energy-

sector-EU-action-plan_en  

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to which the EU may set up joint undertakings or any other structure necessary to efficiently 
carry out EU research, technological development and demonstration programmes. Therefore, 
this amending Regulation will also be based on Article 187 TFEU.  

• 

Subsidiarity (for non-exclusive competence)  

Research  is  a  shared  competence  between  the  EU  and  its  Member  States  according  to  the 
TFEU.  Article  4(3)  specifies  that  in  the  areas  of  research,  technological  development  and 
space  the  EU  can  carry  out  specific  activities,  including  defining  and  implementing 
programmes, without affecting the member states’ freedom to act in the same areas. 

The  proposed  regulation  amends  the  provisions  of  the  Council  Regulation  (EU)  2021/2085 
applicable  to  one  of  the  nine  joint  undertakings  established  thereunder,  the  Key  Digital 
Technologies,  which,  through  this  regulation,  is  renamed  to  Chips  Joint  Undertaking.  The 
Chips Joint Undertaking focuses on areas where there is a demonstrable value added in acting 
at EU level due to the scale, speed and scope of the efforts needed for the EU to meet its long-
term  Treaty  objectives  and  deliver  on  its  strategic  policy  priorities  and  commitments.  The 
proposed initiative should also complement and reinforce national and sub-national activities 
in the same area. Each European partnership, including the Chips Joint Undertaking, is based 
on  a  long-term  Strategic  Research  and  Innovation  Agenda,  and  is  well  suited  to  address 
complex cross-border challenges.  

In particular, the Chips Joint Undertaking focuses on: 

 

 

 

 

strengthening  collaboration  and  knowledge  exchange  between  key  actors  in  the 
European  research  and  innovation  system,  including  cross-disciplinary  and  cross-
sectoral collaboration and an improved integration of value chains and ecosystems; 

ensuring  alignment  and  integration  of  European,  national  /  regional  and  industrial 
research  and  innovation  strategies,  programmes  and  investments  with  the  agreed 
directions; 

creating  critical  scales  of  investments  on  common  priorities  and  increasing  private 
investment in research and innovation; 

reducing risks and uncertainties for industry that are related to investing in research 
and  innovation  activities  and  new  technologies  /  solutions  by  sharing  risks  and 
providing investment predictability. 

Action  at  national  level  or  by  industry  alone  cannot  achieve  the  scale,  speed  and  scope  of 
research  and  innovation  support  needed  for  the  EU  to  meet  its  long-term  Treaty  objectives, 
deliver on its strategic policy priorities (including the climate and energy goals set out in the 
Paris  Agreement,  and  the  European  Green  Deal),  and  to  contribute  to  tackling  global 
challenges and meeting the Sustainable Development Goals (SDGs).  

• 

Proportionality  

The  proportionality  principle  underpins  the  entire  approach  that  led  to  the  current  proposal 
amending  the  Council  Regulation  (EU)  2021/2085  for  Chips  Joint  Undertaking.  Given  the 
greater  focus  on  the  need  to  rationalise  key  EU  policy  priorities  and  ensure  they  have  a 
measurable  and  meaningful  impact,  the  Chips  Joint  Undertaking  proves  its  added  value,  in 
particular by efficiently and effectively achieving objectives that cannot  be more effectively 
achieved through simpler means, including the default approach of traditional Horizon Europe 

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or the Digital Europe Programme calls or simpler partnership forms, such as “co-programmed 
partnerships”.  

In the proposal for Council Regulation (EU) 2021/2085, the proportionality of the Chips Joint 
Undertaking was assessed according to the following two-step logic:  

(1) 

(2) 

Justification  of  the  use  of  a  partnership  approach  in  a  given  area  (including 
considerations  on  additionality,  directionality  and  a  link  with  strategic  priorities) 
instead of other forms of intervention available under Horizon Europe or the Digital 
Europe Programme;  

If  the  partnership  approach  is  deemed  appropriate,  proportionality  considerations 
guided  the  assessment  of  which  type  of  partnership  (co-programmed,  co-funded  or 
institutionalised  partnership)  would  be  most  effective  in  achieving  the  intended 
objectives.  

The proposed amendment to Council Regulation (EU) 2021/2085 adds one further rationale: 

(3) 

Given the relation in scope of the objectives of the Chips for Europe  Initiative with 
the  scope  of  the  KDT  (now,  Chips)  Joint  Undertaking,  it  is  deemed  appropriate  to 
task  this  Joint  Undertaking,  which  is  already  in  force,  with  the  implementation  of 
certain activities related to the Chips for Europe Initiative.   

• 

Choice of the instrument  

This  proposal  aims  to  amend  an  existing  joint  undertaking  established  under  Council 
Regulation  (EU)  2021/2085  and  based  on  Article  187  TFEU.  For  this  kind  of  structure, 
Article 188(1) TFEU requires the adoption of a Council Regulation. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

In  her  speech  at  the  World  Economic  Forum  in  January  2022,  President  von  der  Leyen 
mentioned  that  “we  will  propose  our  European  Chips  Act  in  early  February”  and  that  “we 
have  no  time  to  lose”15.  Leading  economies  are  keen  to  secure  their  supply  in  the  most 
advanced  chips  as  this  increasingly  conditions  their  capacity  to  act  (economically, 
industrially, militarily) and drives  digital  transformation.  They are  already  heavily investing 
and  rolling  out  support  measures  to  innovate  and  strengthen  their  production  capacities,  or 
expect to do so soon16. There are indications that EU companies and RTOs may be attracted 
to move to other regions. International players are less likely to expand existing facilities or 
set  up  new  production  facilities  in  the  EU  without  full  clarity,  including,  on  investment 
conditions,  possibilities  for  public  support,  public  investments  in  skills,  infrastructure,  and 
advanced R&D. 

Given  the  urgent  need  to  act,  no  impact  assessment  was  carried  out  and  no  online  public 
consultation was foreseen. The analysis and all supporting evidence will be set out in a staff 

15  ‘State  of  the  World'  Special  Address  by  President  von  der  Leyen  at  the  World  Economic  Forum. 

https://ec.europa.eu/commission/presscorner/detail/en/speech_22_443 

16  For instance: USA: https://www.congress.gov/bill/117th-congress/senate-bill/1260?s=1&r=52  
   China: https://crsreports.congress.gov/product/pdf/R/R46767  

Japan: 
2021-11-07/ 

https://www.reuters.com/technology/japan-create-scheme-subsidise-domestic-chip-output-nikkei-

   South Korea: https://spectrum.ieee.org/south-koreas-450billion-investment-latest-in-chip-making-push 

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working document published at the latest within three months of the publication of the Chips 
Act proposal. 

Nevertheless,  ad-hoc  workshops  with  industry  stakeholders  on  specific  topics  related  to  the 
Initiative  indicated  the  need  to  consider  facilities  for  upcoming  technologies,  such  as 
photonics, neuromorphic computing, and quantum technologies, as well as new materials17. In 
addition, these workshops emphasised the need for due consideration of alternative instruction 
set architectures, such as RISC-V. 

Furthermore,  in  the  context  of  the  ECSEL  Joint  Undertaking  –  the  predecessor  of  the  Key 
Digital  Technologies  Joint  Undertaking  –  meetings  with  industry  representatives  and  public 
authorities took place in summer 2021, where the Digital Compass objectives, the update of 
the industrial strategy, the Industrial alliance, and the European Chips Act were discussed. 

Regular  meetings  with  Member  States  took  place  monthly  in  2021  to  prepare  the  planned 
second IPCEI on Microelectronics. They provided inputs for the definition and assessment of 
Integrated Production Facilities and Open EU Foundries of the proposed regulation, as well as 
for the definition of specific facilities under the regulation. 

A  meeting  with  CEOs  representing  key  stakeholders  in  the  European  semiconductor 
ecosystem took place on 10 January 2022. Key takeaways from that meeting relevant for this 
proposal were: building on European strengths, e.g. R&D and equipment manufacturing; clear 
support for pilot lines and design infrastructures; and the need for a worldwide level playing 
field18. 

There were also numerous meetings with representatives of CEOs on the need to strengthen 
the European sector, following Commissioner Breton’s meetings with the CEOs of the main 
semiconductor  players  and  RTOs.  These  provided  inputs  notably  to  the  research  and 
innovation activities and capacity building activities to be implemented in the Chips JU. 

The European Forum for Electronic Components and Systems (EFECS), in November 2021, 
with  over  500  participants,  provided  a  large  platform  for  discussion  on  industrial  needs. 
Further input was provided in meetings with industry associations and their members, such as 
SEMI, ESIA, and DigitalEurope. 

Moreover,  long-standing  and  regular  contacts  with  industry  stakeholders,  Member  States, 
trade associations, and user associations enabled the collection of a fair amount of information 
and feedback relevant to the proposal. 

Many  reports  have  been  published  since  end-2019  on  the  semiconductor  sector  describing 
trends and providing facts and figures, and served to inform the proposal19.  

17  https://ecscollaborationtool.eu/ecs-sria-workshops.html  
18  https://digital-strategy.ec.europa.eu/en/news/ceo-roundtable-semiconductors-10-january-2022  
19  A non-exhaustive list: Measuring distortions in international markets: The semiconductor value chain OECD 
2019;  The  Geopolitics  of  Semiconductors,  prepared  by  EURASIA  group,  Sept  2020;  The  global 
semiconductor value chain, Stiftung Neue  Verantwortung,  Oct 2020; The Weak Links in China's Drive  for 
Semiconductors,  Montaigne  institute,  Jan  2021;  Strengthening  the  Semiconductor  supply  chain  in  an 
uncertain  Era,  BCGxSIA,  April  2021;  SIA  Factbook,  May  2021;  Building  Resilient  Supply  Chains, 
Revitalizing  American  Manufacturing,  and  Fostering  Broad-Based  Growth,  A  Report  by  the  White  House, 
June 2021; Mapping China’s semiconductor ecosystem in global context, Stiftung Neue Verantwortung, June 
2021; Semiconductors Global Policy Review Access Partnership, Sept 2021; Semiconductors: U.S. Industry, 
Global  Competition,  and  Federal  Policy,  Congressional  Report  Service  October  2021;  Semiconductor 
Strategy for Germany and Europe, ZVEI, Oct  2021; Understanding the  global chip shortage Stiftung Neue 
Verantwortung, Nov 2021. 

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• 

Impact assessment 

This proposal is not accompanied by a formal impact assessment. Considering the urgency as 
explained  above,  an  impact  assessment  could  not  have  been  delivered  in  the  timeframe 
available prior to the adoption of the proposal.  

• 

Fundamental rights 

Article  16  of  the  Charter  of  Fundamental  Rights  of  the  European  Union  (‘the  Charter’) 
provides  for  the  freedom  to  conduct  business.  The  measures  under  this  proposal  create 
innovation capacity and foster the security of supply of semiconductors, which can reinforce 
the  freedom  to  conduct  a  business  in  accordance  with  Union  law  and  national  laws  and 
practices. 

4. 

BUDGETARY IMPLICATIONS 

The  EU  budget  will  support  the  Chips  for  Europe  Initiative  with  a  total  of  up  to  EUR  3.3 
billion, including EUR 1.65 billion via Horizon Europe programme and EUR 1.65 billion via 
Digital Europe Programme. Out of this total amount, EUR 2.875 billion will be implemented 
through the Chips Joint Undertaking. 

Further details are provided in the Legislative Financial Statement annexed to the ‘Chips Act’ 
proposal. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The Chips Joint Undertaking will be monitored and evaluated in line with Articles 50 and 52 
and Annex III of the Horizon Europe Regulation. The interim and ex-post evaluations will be 
supported  by  external  contractors  and  fed  into  the  overall  Horizon  Europe  evaluations.  In 
accordance with the criteria set for European partnerships, the evaluations will assess the most 
effective policy intervention mode for any future action, as well as the possible renewal of the 
partnership  within  the  overall  European  partnerships  landscape.  In  the  absence  of  renewal, 
appropriate measures will be developed to ensure the phasing-out of framework programme 
funding according to the conditions and timeline agreed with the partners of the partnership. 

• 

Detailed explanation of the specific provisions of the proposal 

The  institutionalised  European  partnerships,  including  the  Chips  Joint  Undertaking,  are 
designed  to  increase  coherence  and  to  maximise  impact  in  an  evolving  research  and 
innovation landscape.  

The  amendment  to  Council  Regulation  (EU)  2021/2085  is  necessary  in  order  to  allow  the 
Chips  Joint  Undertaking  to  implement  the  Chips  for  Europe  Initiative  established  under 
Regulation  (EU)  […]  establishing  a  framework  of  measures  for  strengthening  Europe’s 
semiconductor ecosystem (the ‘Chips Act’). To this end, the following proposed amendments 
to Council Regulation (EU) 2021/2085 are required: 

(1) 

Amendments  to  ‘Part  One’  on  ‘Common  Provisions’  of  Council  Regulation  (EU) 
2021/2085: 

Article  2  (Definitions):  the  definitions  on  ‘founding  member’,  ‘associated  member’, 
‘participating state’ and ‘work programme’ are amended in order to include the fact that the 
Chips Joint Undertaking will now also be financed from the Digital Europe Programme.  

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Article  3  (Establishment):  under  this  Article,  the  name  of  the  former  Key  Digital 
Technologies Joint Undertaking is renamed to ‘Chips Joint Undertaking’.  

Article  4  (Objectives  and  principles)  is  amended  to  make  sure  that  the  Chips  Joint 
Undertaking  also  contributes  to  the  general  and  specific  objectives  of  the  Chips  for  Europe 
Initiative and the Digital Europe Programme. 

Article  10  (Union  financial  contribution)  is  amended  to  reflect  the  fact  that  the  Union 
contribution  can  also  be  paid  from  the  appropriations  in  the  general  budget  of  the  Union 
allocated to the Specific Objective implementing the Digital Europe Programme.  

Article 12(1) (Management of contributions from the participating states) is amended to 
reflect that the eligibility criteria set out in Article 18 of the Digital Europe Programme should 
also  be  taken  into  account  in  the  work  programme.  Furthermore,  each  participating  state 
should  entrust  the  joint  undertaking  with  the  evaluation  of  the  proposals  according  to  the 
contributing Union programme. 

Article 29(2) (Financial commitments) is amended to include the Chips Joint Undertaking 
amongst  the  joint  undertakings  that  can  divide  their  budgetary  commitments  into  annual 
instalments. 

(2) 

Amendments 
Undertakings’ of Council Regulation (EU) 2021/2085: 

to  ‘Part  Two’  on  ‘Specific  Provisions  Of  Individual  Joint 

Article 126 (Additional objectives of the Chips Joint Undertaking) is amended to add one 
general  and  four  specific  additional  objectives  of  the  Chips  Joint  Undertaking.  The  general 
objective  focuses  on  the  increase  large-scale  capacity  throughout  the  Union  in  cutting-edge 
and next-generation semiconductor technologies, while the four specific objectives  focus  on 
building  up  large-scale  design  capacities  for  integrated  semiconductor  technologies, 
enhancing  existing  and  developing  new  pilot  lines,  building  advanced  technology  and 
engineering  capacities  for  accelerating  the  development  of  quantum  chips,  and  creating  a 
network of competence centres across Europe. 

Article  128  is  amended  in  order  to  reflect  the  increased  budget,  from  two  different 
Programmes (Horizon Europe and the Digital Europe Programme). 

Article 129 is amended in order to determine the contribution to administrative costs of the 
private members of the Chips Joint Undertaking. 

Article  133  (Functioning  of  the  Governing  Board)  is  amended  to  specify  that  the 
Governing Board solely includes the Commission and public authorities from Member States 
when voting on the part of the work programme related to capacity building activities. 

Article  133a  (Rules  applicable  to  the  activities  funded  under  the  Digital  Europe 
Programme) is added to clarify that rules related to the Digital Europe Programme apply to 
the Chips Joint Undertaking. 

Article 134 (Limitations and conditions to participation in specific actions) is amended to 
allow for the possibility to limit the participation in specific actions funded under the Digital 
Europe  programme.  Furthermore,  the  new  third  paragraph  3  of  Article  134  indicates  that 
certain actions may be carried out by legal entities cooperating within a consortium of at least 
three eligible legal entities which are established in at least three different Member States or 
countries associated to the Initiative. It specifies that this consortium may be structured in the 
form of a European Chips Infrastructure Consortium, as laid down in the Chips Act. 

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Article  134a  (Additional  tasks  of  the  Executive  Director)  specifies  that  the  Executive 
Director needs to take into account the definition made by the Public Authorities Board on the 
part of the work programme related to capacity building activities and research and innovation 
activities, including their corresponding expenditure estimates. 

Article 136 (Functioning of the Public Authorities Board) is amended to add four further 
situations in which the Public Authorities Board  solely includes the Commission and public 
authorities from Member States.  

Article  137  (Tasks  of  the  Public  Authorities  Board)  is  amended  in  order  to  add  two 
additional  tasks  to  the  Chips  Joint  Undertaking’s  Public  Authorities  Board,  namely  the 
definition  of  the  part  of  the  work  programme  related  to  capacity  building  activities  and 
research and innovation activities and the selection of projects related to these activities. For 
both tasks, the Public Authorities Board includes only the Commission and public authorities 
from Member States.  

Article  141  (funding  rates)  is  amended  in  order  to  allow,  for  activities  funded  under  the 
Digital  Europe  programme, the Chips Joint Undertaking  to apply different  funding rates for 
the Union funding within an action depending on the type of participant, in particular SMEs 
and non-profit legal entities, and the type of action. Furthermore, a new paragraph is added in 
order  to  allow  a  single  legal  entity  established  in  a  Member  State  or  associated  country  or 
consortia  not  meeting  the  condition  laid  down  in  Article  22(2)  of  the  Horizon  Europe 
Regulation  to  be  eligible  to  participate  in  indirect  actions  funded  by  the  Chips  Joint 
Undertaking. 

Finally,  point  17  of  this  regulation  indicates  that  references  to  “Key  Digital  Technologies 
Joint Undertaking” should be understood as referring to “Chips Joint Undertaking”. 

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2022/0033 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EU) 2021/2085 establishing the Joint Undertakings under 
Horizon Europe, as regards the Chips Joint Undertaking 

(Text with EEA relevance) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 187 and Article 188, first paragraph thereof, 

Having regard to the proposal from the European Commission, 
Having regard to the opinion of the European Parliament20, 
Having regard to the opinion of the European Economic and Social Committee21, 

Whereas: 

(1) 

(2) 

(3) 

Council  Regulation  (EU)  2021/208522  establishes  the  Joint  Undertakings  under 
Horizon Europe, including the Key Digital Technologies Joint Undertaking. 

The Key Digital Technologies Joint Undertaking addresses clearly defined topics that 
enable  European  industries  at  large  to  design,  manufacture  and  use  the  most 
innovative technologies in electronic components and systems.  
Regulation (EU) […]23 establishes a framework for increasing the Union’s resilience 
in  the field of semiconductor technologies, stimulating investment, strengthening the 
capabilities of the  European semiconductor supply  chain,  and increasing  cooperation 
among the Member States and the Commission. To create the conditions necessary to 
strengthen the Union’s industrial innovation capacity, the Chips for Europe  Initiative 
(the ‘Initiative’) is  established.  In order to  ensure a consistent implementation of the 
Initiative,  the  European  Semiconductor  Board  should  provide  advice  to  the  Public 
Authorities Board.  

(4) 

The  activities  supported  under  the  Initiative  should  be  funded  from  Regulation  (EU) 
2021/695  of  the  European  Parliament  and  of  the  Council24  establishing  the  Horizon 

20 
21 
22 

23 
24 

OJ C , , p. . 
OJ C , , p. . 
Council  Regulation  (EU)  2021/2085  of  19  November  2021  establishing  the  Joint  Undertakings  under 
Horizon Europe and repealing Regulations (EC) No 219/2007, (EU) No 557/2014, (EU) No 558/2014, 
(EU)  No  559/2014,  (EU)  No  560/2014,  (EU)  No  561/2014  and  (EU)  No  642/2014  (OJ  L  427, 
30.11.2021, p.17). 
OJ L …, p… 
Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing 
Horizon  Europe  –  the  Framework  Programme  for  Research  and  Innovation,  laying  down  its  rules  for 
participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013 
(OJ L 170, 12.5.2021, p. 1). 

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(5) 

(6) 

(7) 

Europe Programme and  from Regulation  (EU) 2021/694  of the European Parliament 
and of the Council25 establishing the Digital Europe Programme. 

to  reinforce 

the  competitiveness  and  resilience  of 

The  Initiative  aims 
the 
semiconductor  technological  and  industrial  base,  whilst  strengthening  the  innovation 
capacity of its semiconductor ecosystem, reducing dependence on a limited number of 
third country companies and geographies, and strengthening its capacity to design and 
produce  advanced  components. These aims  should  be supported  by bridging the  gap 
between the Union’s advanced research and innovation capabilities and their industrial 
exploitation.  It  should  promote  capacity  building  to  enable  design,  production  and 
systems 
technologies,  enhance 
collaboration  among  key  players  across 
the  Union,  strengthening  Europe’s 
semiconductor  supply  and  value  chains,  serving  key  industrial  sectors,  and  creating 
new markets. 

in  next-generation  semiconductor 

integration 

The  Initiative  should  be  implemented  through  actions  that  should  build  upon  the 
strong knowledge base  acquired by the Key Digital  Technologies Joint Undertaking. 
The  Key  Digital  Technologies  Joint  Undertaking  should  be  tasked  with  providing 
financial support, through any instrument or procedure provided for in Horizon Europe 
or the Digital Europe Programme, to actions funded under the Initiative. Furthermore, 
the  Key  Digital  Technologies  Joint  Undertaking  should  be  renamed  to  Chips  Joint 
Undertaking.    Throughout  the  lifetime  of  the  Chips  Joint  Undertaking,  at  least  EUR 
2.5  billion  should  be  dedicated  to  pilot  lines,  design  infrastructures,  competence 
centres, and other capacity building activities.  

The activities funded by the Chips Joint Undertaking should be covered in one single 
work  programme,  which  should  be  adopted  by  the  Governing  Board.  Before  each 
work  programme  is  prepared,  the  Public  Authorities  Board,  taking  into  account  the 
advice  of  the  European  Semiconductor  Board  and  input  from  other  relevant 
stakeholders,  including  as  appropriate,  roadmaps  produced  by  the  Alliance  on 
Processors  and  Semiconductor  Technologies26,  should  define  the  part  of  the  work 
programme  related  to  capacity  building  activities  and  research  and  innovation 
activities,  including  their  corresponding  expenditure  estimates.  For  this  purpose,  the 
Public Authorities Board  should include  only  the Commission  and public authorities 
from  Member  States.  Subsequently,  on  the  basis  of  this  definition,  the  Executive 
Director should prepare the work programme including capacity building and research 
and innovation activities and their corresponding expenditure estimates.   

(8)  When the Governing Board adopts the work programme, the voting rights for the part 
of  the  work  programme  related  to  capacity  building  should  be  limited  to  the 
Commission  and  Member  States  only.  The  voting  rights  for  the  part  of  the  work 
programme  related  to  R&I  activities  should  be  equally  shared  between  the 
Commission,  the  Participating  States,  and  the  private  members.  In  the  event  that  a 
decision on one of the two parts of the work programme cannot be reached, the work 
programme should be adopted including only the part on which a positive decision has 
been reached. 

25 

26  

Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021 establishing 
the Digital Europe Programme and repealing Decision (EU) 2015/2240 (OJ L 166, 11.5.2021, p. 1). 
The Alliance is referred to in the Communication from the Commission of 5 May 2021 on ‘Updating 
the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery’. 

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(9) 

The  Public  Authorities  Board  should  be  responsible  for  the  selection  of  the  projects 
related to  capacity building activities.  For this purpose, the Public Authorities Board 
should include only the Commission and public authorities from Member States.  

(10)  The  Public  Authorities  Board  should  be  responsible  for  the  selection  of  the  projects 

related to R&I activities.  

(11)  With a view to accelerating implementation of the actions of the Initiative and enhance 
cooperation  between 
legal  entities,  particularly  Research  and  Technology 
Organisations, certain proposals for actions should be eligible for funding only if the 
action is carried out by legal entities cooperating within a consortium of at least three 
legal  entities  from  three  different  Members  States.  That  consortium  could  be 
structured either as the European Chips  Infrastructure Consortium as proposed in the 
‘Chips  Act’,  or based on other available legal  tools under Union law. Given that the 
activities  supported  under  the  Initiative  and  implemented  by  the  Chips  Joint 
Undertaking  are  financed  from  Horizon  Europe  programme  and  the  Digital  Europe 
programme, the Union financial contribution to the Chips Joint Undertaking indicated 
in Article 128 of Council Regulation (EU) 2021/2085 should be increased accordingly. 
The  administrative  costs  of  the  Chips  Joint  Undertaking  should  also  be  increased  in 
accordance  with  the  increase  of  operational  tasks.  The  private  members  should  not 
contribute to the additional administrative costs.  

(12)  Provision of financial support to activities from the Digital Europe Programme should 

comply with Regulation (EU) 2021/694. 

(13)  The  Chips  Joint  Undertaking  should  facilitate  cooperation  between  the  Union  and 
international  actors  by  defining  a  cooperation  strategy,  including  identifying  and 
promoting areas for cooperation in research and development and skills development, 
and implementing actions where there is a mutual benefit, mainly based on reciprocity. 

(14)  Council Regulation (EU) 2021/2085 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Regulation (EU) 2021/2085 is amended as follows: 

Article 1 

(1) 

Article 2 is amended as follows: 

(a)  Points 2, 3 and 4 are replaced by the following: 

“2.  ‘founding  member’  means  any  legal  entity  established  in  a  Member  State,  a 
country associated to Horizon Europe or, where applicable, to the Digital Europe 
Programme, or an international organisation that is identified as a member of a joint 
undertaking in this Regulation or in one of its Annexes; 

“3.  ‘associated  member’  means  any  legal  entity  established  in  a  Member  State,  a 
country associated to Horizon Europe or, where applicable,  to the Digital Europe 
Programme, or an international organisation that accedes to a joint undertaking by 
signing  a  letter  of  commitment  in  accordance  with  Article  6(3)  and  subject  to  an 
approval in accordance with Article 7;  

 4.  ‘participating  state’  means  any  Member  State  or  country  associated  to  Horizon 
Europe or, where applicable, to the Digital Europe Programme upon notification 

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of  its  participation  in  the  activities  of  the  relevant  joint  undertaking  by  means  of  a 
letter of commitment;”; 

(2) 

Article 3 is amended as follows: 

(a) 

In paragraph 1, point (g) is replaced by the following: 

“(g)  the Chips Joint Undertaking;”; 

(b)  paragraph 3 is replaced by the following: 

“3.  In  order  to  take  into  account  the  duration  of  Horizon  Europe  and,  where 
applicable,  the  Digital  Europe  Programme,  calls  for  proposals  under  the  joint 
undertakings shall be launched at the latest by 31 December 2027. In duly justified 
cases, calls for proposals may be launched by 31 December 2028, at the latest.” 

(3) 

In Article 4 (1), the following subparagraph is added: 

“The  Chips  Joint  Undertaking  shall  also  contribute  to  the  objectives  of  the 
Chips for Europe Initiative and the Digital Europe Programme”. 

(4) 

In Article 10,  paragraphs 2 and 3 are replaced by the following: 

“2.  The  amount  of  the  Union  contribution  specified  in  Part  Two  may  be  increased 
with  contributions  from  third  countries  associated  to  Horizon  Europe  in  line  with 
Article  16(5)  of  Regulation  (EU)  2021/695  and,  where  applicable,  to  the  Digital 
Europe  Programme  in  accordance  with  point  (d)  of  Article  10(1)  of  Regulation 
(EU)  2021/694,  provided  that  the  total  amount  by  which  the  Union  contribution  is 
increased is at least matched by the contribution of members other than the Union, or 
their constituent or affiliated entities.  

3. The Union contribution shall be paid from the appropriations in the general budget 
of  the  Union  allocated  to  the  Specific  Programme  implementing  Horizon  Europe 
and,  where  applicable,  to  the  Digital  Europe  Programme,  in  accordance  with 
Article 62(1), point (c)(iv), and Article 154 of Regulation (EU, Euratom) 2018/1046 
in the case of bodies referred to in Article 71 of that Regulation.” 

(5) 

Article 12(1) is amended as follows: 

(a)  The second subparagraph of paragraph 1 is replaced by the following: 

“1. In addition to criteria set out in Article 22 of the Horizon Europe Regulation or, 
in the case of the Chips Joint Undertaking, in Article 18 of the Digital Europe 
Programme,  the  work  programme  may  include,  as  an  annex,  eligibility  criteria 
regarding national legal entities.” 

(b)  The third subparagraph of paragraph 1 is replaced by the following: 

“Each participating state shall entrust the joint undertaking with the evaluation of the 
proposals according to the contributing Union programme.” 

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(6) 

In Article 29, paragraph 2 is replaced by the following: 

(a)  Paragraph 2 is replaced by the following: 

“2.  Budgetary  commitments  of  the  joint  undertakings  referred  to  in  Article  3(1), 
points  (b),  (d),  (g)  and  (h),  may  be  divided  into  annual  instalments.  Until  31 
December  2024,  the  cumulative  amount  of  those  budgetary  commitments  in 
instalments  shall  not  exceed  50  %  of  the  maximum  Union  contribution  set  out  in 
Article 10. From January 2025, at least 20 % of the cumulative budget of the residual 
years shall not be covered by annual instalments.” 

(7) 

Article 126 is amended as follows: 

(a) 

In paragraph 1 point (b) is replaced by the following:  

“(b)  Establish  Union  scientific  excellence  and  innovation  leadership  in 
emerging  components  and  systems  technologies,  including  in  activities 
related  to  lower  TRLs;  and  promote  the  active  involvement  of  SMEs, 
which shall represent at least one third of the total number of participants 
in  indirect  actions  and  at  least  20  %  of  public  funding  dedicated  to 
research and innovation actions should go to them. 

(b) 

In paragraph 1 the following point (d) is added: 

“(d)  increase  large-scale  capacity  throughout  the  Union  in  cutting-
edge  and  next-generation  semiconductor  technologies  to  reinforce 
the Union’s advanced design, systems integration and semiconductor 
production  capabilities  and  limit  where  possible  the  environmental 
footprint.” 

(c) 

In paragraph 2 point (f) is replaced by the following: 

“(f)  establish  coherence  between  the  Strategic  Research  and  Innovation 
Agenda  of  the  Chips  Joint  Undertaking  inputs  from  other  relevant 
stakeholders,  including  as  appropriate,  roadmaps  produced  by  the 
Alliance  on  Processors  and  Semiconductor  technologies  and  Union 
policies  so  that  electronics  components  and  systems  technologies 
contribute efficiently.” 

(d) 

In paragraph 2 the following points (g), (h), (i) and (j) are added: 

“(g)  build  up 
semiconductor technologies.  

large-scale  design  capacities 

for 

integrated 

(h) enhance existing and develop new pilot lines.  

(i)  build  advanced  technology  and  engineering  capacities  for 
accelerating the development of quantum chips. 

(j) establish a network of competence centres across Europe.” 

(8) 

Article 128 is replaced by the following: 

Article 128 

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1. 

2. 

3. 

4. 

5. 

The  Union  financial  contribution  to  the  Joint  Undertaking  including  EEA 
appropriations shall be up to EUR 4 175 000 000, including up to EUR 50 174 000 
for administrative costs distributed as follows: 

(a) up to EUR 2 650 000 000 from Horizon Europe; 

(b) up to EUR 1 525 000 000 from the Digital Europe Programme; 

The  Union  financial  contribution  referred  to  in  paragraph  1  shall  be  paid  from  the 
appropriations  in  the  general  budget  of  the  Union  allocated  to  each  relevant 
programme.   

Additional Union funds complementing the contribution referred to in paragraph 1 of 
this Article may be allocated to the Joint Undertaking from third countries associated 
to  Horizon  Europe  or  the  Digital  Europe  Programme  in  accordance  with  their 
respective association agreements. Those additional Union funds shall not affect the 
Participating States’ contribution referred to in Article 129(1). 

The Union financial contribution referred to in paragraph 1 point (a) of this Article 
shall be used for the Joint Undertaking to provide financial support to indirect actions 
as  defined  in  Article  2,  point  (43),  of  Regulation  (EU)  2021/695,  corresponding  to 
the research and innovation activities of the Joint Undertaking. 

The Union financial contribution referred to in paragraph 1 point (b) shall be used for 
capability building for pilot lines and design infrastructures across the whole Union. 

(9) 

In Article 129 paragraph 3 is replaced by the following: 

“3.  By  way  of  derogation  from  Article  28(4),  the  private  members  shall  make  or 
arrange for their constituent and affiliated entities to make a financial contribution of 
at  least  EUR  26  331  000  for  administrative  costs  of  the  Chips  Joint  Undertaking. 
The share of the total contribution on an annual basis for administrative costs of 
the Chips Joint Undertaking by the private members shall be 35%.” 

(10) 

In Article 133, the following paragraph 3a is added: 

“3a.  The  Governing  Board  shall  solely  include  the  Commission  and  public 
authorities  from  Member  States  when  voting  on  the  part  of  the  work 
programme  related  to  capacity  building  activities.  The  Commission  shall  hold 
50% of the voting rights. Paragraphs 2 and 3 shall apply mutatis mutandis to the 
voting rights of the Member States.” 

(11) 

The following Article 133a is inserted  

Article 133a 

Rules applicable to the activities funded under the Digital Europe Programme 

1. 

2. 

Regulation  (EU)  2021/694  shall  apply  to  the  activities  funded  by  the  Chips  Joint 
Undertaking under the Digital Europe Programme.  

The work programme and the calls for proposals of the Chips Joint Undertaking shall 
be published on the website of the Digital Europe Programme. 

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3. 

In the case of the Chips Joint Undertaking, ex post audits of expenditure on activities 
funded  by  the  Digital  Europe  Programme  budget  shall  be  carried  out  by  the  Joint 
Undertaking in accordance with Article 27 of Regulation (EU) 2021/694. 

(12) 

Article 134 is replaced by the following: 

Limitations and conditions to participation in specific actions 

Article 134 

1. 

2. 

3. 

4. 

For  actions  funded  under  the  Horizon  Europe,  by  way  of  derogation  from  Article 
17(2), point (l), where the Commission so requests, following approval of the Public 
Authorities  Board,  participation  in  specific  actions  shall  be  limited  in  accordance 
with Article 22(5) of Regulation (EU) 2021/695. 

For actions funded under the Digital Europe Programme, where the Commission so 
requests, following approval of the Public Authorities Board, participation in specific 
actions  shall be limited in accordance with  Articles 12(6)  and 18 of the Regulation 
(EU) 2021/694. 

For  actions  funded  under  more  than  one  contributing  Union  programme,  the  work 
programme  shall  set  joint  conditions,  including  for  the  limitation  of  participation 
under paragraphs 1-2 of this Article, in accordance with the rules of the contributing 
Union programmes.  

Certain actions may be carried out by legal entities cooperating within a consortium 
structured  in  a  form  of  European  Chips  Infrastructure  Consortium.  The  actions  for 
which such consortium may be necessary, as well as specific eligibility requirements 
for  implementing  specific  actions  and  tasks,  and,  where  appropriate,  operational 
requirements for setting up, operating, and winding up shall be defined in the work 
programme.  

(13) 

The following Article 134a is inserted  

Article 134a 

Additional tasks of the Executive Director 

In  addition  to  the  tasks  listed  in  Article  19,  the  Executive  Director  of  the  Chips  Joint 
Undertaking  shall  prepare  and,  after  having  taken  into  account  the  definition  of  the 
Public Authorities Board referred to in Article 137(f), as well as the inputs from relevant 
stakeholders  including  as  appropriate,  roadmaps  produced  by  the  Alliance  on 
Processors  and  Semiconductor  technologies,  submit  for  adoption  to  the  Governing 
Board  the  work  programme  for  the  joint  undertaking,  to  implement  the  Strategic 
Research and Innovation Agenda.  

(14) 

Article 136 is amended as follows: 

(a) 

Paragraph 2 is replaced by the following: 

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“2. For the purpose of paragraphs (1) and (2) Article 134 and points (f) and (g) of 
Article  137,  the  Public  Authorities  Board  shall  include  only  the  Commission  and 
public authorities from Member States. Paragraph 1 shall apply mutatis mutandis.” 

(15) 

Article 137 is amended as follows: 

(a) 

The following points (f) and (g) are added: 

“(f)  before  each  work  programme  is  prepared,  define  the  part  of  the  work 
programme related to capacity building activities and research and innovation 
activities,  including  the  corresponding  expenditure  estimates,  taking  into 
account the advice of the European Semiconductor Board and input from other 
relevant  stakeholders,  including  as  appropriate,  roadmaps  produced  by  the 
Alliance on Processors and Semiconductor Technologies;  

(g) select proposals corresponding to  capacity building activities in accordance 
with Articles 12(1) and 17(2), point (u);” 

(b) 

Point (d) is replaced by the following: 

“(d)  select  proposals  corresponding  to  research  and  innovation  activities  in 
accordance with Articles 12(1) and 17(2), point (u);” 

(16) 

Article 141 is replaced by the following: 

Article 141 

Funding rates and rules for participation 

1. 

2. 

For indirect actions funded under Horizon Europe, in accordance with Article 17(2) 
of  Regulation  (EU)  2021/695  and  by  way  of  derogation  from  Article  34  of  that 
Regulation and for activities funded under the Digital Europe Programme, the Chips 
Joint Undertaking may apply different funding rates for the Union funding within an 
action depending on the type of participant, in particular SMEs and non-profit legal 
entities,  and  the  type  of  action.  The  funding  rates  shall  be  indicated  in  the  work 
programme. 

Where it is duly justified in the description of relevant topics in the work programme, 
a single legal entity established in a Member State or associated country or consortia 
not meeting the condition laid down in Article 22(2) of Regulation (EU) 2021/695 or 
in Article 18 of Regulation (EU) 2021/694 shall be eligible to participate in actions 
funded by the Chips Joint Undertaking. 

(17) 

The references to “Key Digital Technologies Joint Undertaking” shall be understood 
as referring to “Chips Joint Undertaking”. 

This Regulation shall enter into force on the date of its publication in the Official Journal of 
the European Union. 

Article 2  

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This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

Please see LFS of the Chips Act Regulation 

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