354: Chapter 354 EU Chip Act

Brussels, April 20th. The sky was gray, like a worn-out rag.

Inside the Council of the European Union Building, an emergency meeting was underway. Around a massive circular table, representatives from twenty-seven nations sat in a ring, anxiety visible on every face. The clock on the wall already pointed to three in the afternoon, but no one was in the mood to care about the time.

Ursula, President of the European Commission, stood at the podium. Sixty years old and dressed in a deep blue suit, her hair was meticulously combed back. But at this moment, her expression lacked its usual composure.

"Everyone, Xingchen's seven-nanometer chips have reached mass production, with prices thirty percent cheaper than ours. Europe's chip industry is facing a matter of life and death."

She gestured, and the large screen behind her lit up.

Current State of the European chip Industry

Global chip production capacity share: 9% (was 44% in 1990)

Advanced processes (below 7nm): 0%

Import dependency: 80%

A low murmur of discussion rippled through the meeting room.

Ursula continued: "The European Union has urgently passed the 'European Chips Act'—allocating forty-three billion euros with the goal of capturing twenty percent of global chip production capacity by 2030."

The German representative raised a hand: "Madam President, we have the money, but what about the technology? Can forty-three billion buy Xingchen's technology?"

Ursula remained silent.

The French representative followed up: "We won't catch up to Xingchen's seven-nanometer chips even in ten years. Is this money for Intel or for Samsung?"

Ursula finally spoke, her voice carrying a hint of helplessness: "Invest the money first, then find the technology. Europe cannot be without a chip industry."

Below the stage, the representatives from Eastern Europe looked at each other.

On the night of the 25th, Berlin.

The lights were still on at the German Chancellery. This simple gray building located in central Berlin was unassuming on the outside, yet it was one of the cores of European power.

Merkel sat in her office, an encrypted phone on the desk before her. The sixty-five-year-old German Chancellor wore a dark gray jacket; her hair had turned gray, but her eyes remained sharp. She had governed for fourteen years, weathering the Eurozone crisis, the refugee crisis, and the Crimean crisis, but now she faced another—an industrial survival crisis.

She took a deep breath, picked up the phone, and dialed the number.

It rang three times before the call connected.

"Mr. Su, sorry to disturb you."

Su Chen's voice came through the receiver, as calm as if he were chatting about the weather: "Madam Chancellor, not asleep yet at this late hour?"

Merkel smiled bitterly: "I can't sleep. Xingchen's chips are keeping Europe awake."

She paused: "Germany wants to invite Xingchen to build a factory. We can provide land, subsidies, and talent. You name the conditions."

Su Chen was silent for three seconds: "Madam Chancellor, the European Union has a forty-three billion subsidy plan. Is Germany not afraid of Brussels' dissatisfaction by acting alone?"

Merkel smiled, a hint of cunning in her expression: "Mr. Su, forty-three billion is just a slogan. What can actually be implemented depends on the member states. Germany is willing to be the first to take the risk."

On the other end of the line, Su Chen also laughed: "Madam Chancellor, this call of yours is more effective than all the acts in Brussels."

The 28th, Paris.

In the President's office at the Élysée Palace, Macron sat behind his desk. The forty-two-year-old French President was Europe's youngest leader, ambitious and eager to revitalize French industry.

He also picked up the phone.

"Mr. Su, France has the finest mathematicians and engineers. If Xingchen's AI chips could be designed in France and produced in Europe, it would be the greatest contribution to European sovereignty."

Su Chen asked: "Mr. President, will the United States sanction France?"

Macron smiled, his smile carrying the pride unique to France: "France is independent in defense and economy; we do not fear sanctions."

Su Chen said: "Mr. President, Xingchen can consider collaborating with STMicroelectronics to build a fourteen-nanometer production line in France, with an annual output of five hundred thousand wafers."

Macron's eyes lit up: "When?"

Su Chen said: "After the German production line is completed. Xingchen's capacity is limited; we have to go in order."

Macron nodded: "I can wait. France has patience."

May 5th, Brussels.

The U.S. Embassy to the European Union is located next to Schuman Square, a modern glass building. In the Ambassador's office, Gordon Sondland was urgently meeting with EU officials.

Sixty-five-year-old Sondland was a senior American diplomat who had been in the EU for five years and believed he knew the continent like the back of his hand. But now, he realized he might be wrong.

The EU official opposite him was a middle-aged man around fifty, wearing a dark suit and showing no expression.

Sondland got straight to the point: "I heard Germany and France are having private contacts with Xingchen?"

The EU official nodded: "Yes."

Sondland's expression changed: "And you, the European Union, aren't doing anything about it?"

The EU official shook his head: "Mr. Ambassador, the European Union cannot control its member states. We cannot stop what Germany and France want to do."

Sondland slammed the table: "The United States will sanction any European company that cooperates with Xingchen!"

The EU official looked up at him; there was no fear in his eyes, only a strange calmness.

"Mr. Ambassador, the Federation of German Industries just issued a statement. Would you like me to read it to you?"

He took out his phone, turned on the screen, and read slowly: "The United States cannot save European industry. Xingchen can."

Sondland's face turned ashen.

May 10th, in the press hall of Xingchen Headquarters, over three hundred journalists were already seated. On the large screen was the emblem of Xingchen, with a line of small text below: "Xingchen chip · Europe Strategy".

Li Wanqing stepped onto the stage.

The thirty-eight-year-old President of Xinghuo Chip wore a white suit, her hair meticulously styled. She stood behind the podium, her gaze scanning the audience.

"Xingchen Group has decided to build Europe's first chip factory in Dresden, Germany. Partner: Infineon."

Data appeared on the large screen:

Xingchen-Dresden Chip Factory

Process: 16nm mature process (subsequent upgrade to 7nm)

Capacity: 600,000 wafers per year

Investment: 12 billion euros

Employment: 3,000 direct jobs, 15,000 indirect jobs

Production start time: 2021

A journalist in the audience raised a hand: "President Li, why choose Dresden?"

Li Wanqing smiled: "Because it has Europe's best semiconductor talent, the sincerity of the German government, and—Chancellor Merkel's sincerity."

A burst of laughter erupted from the audience.

Another journalist asked: "What about France? President Macron also called."

Li Wanqing nodded: "We will go to France as well. We will collaborate with STMicroelectronics to build a fourteen-nanometer production line in Grenoble. This will be after the German production line is completed."

She paused: "Xingchen's principle is—first come, first served."

At eight in the evening, Li Wanqing pushed open the door and entered.

"President Su, the Dresden project has been announced. The reaction from the European Union side is a bit complicated."

Su Chen stood by the window, looking at the night view of Shenzhen Bay.

"It's only right that it's complicated. Let them be complicated."

Li Wanqing asked: "Will the United States really sanction German companies?"

Su Chen turned around: "Sanctions? They've been sanctioning for three years, and what's the result? Xingchen is getting bigger and bigger, and instead, Europe is leaning toward us."

He walked back to the window: "Let them sanction. With every sanction, another country joins us."