A Data Space in All but Name: the B2B Semiconductor Supply Chain Platform under the New EU Chips Act Proposal - CiTiP blog
*Alongside the recent Tech Sovereignty Strategy (TSS), the European Commission also proposed a revision to the Chips Act (...*
Conducting Semiconductor Crises
Semiconductors have achieved perennial economic significance, not just in their established use for regular forms of computing, but as the basis of the economy of artificial intelligence. By some estimates, the market for semiconductors is expected to surpass a 1 trillion USD valuation this year. Readers may be familiar with news of leading semiconductor industry players such as the US’s Nvidia, Taiwan’s TSMC or the Netherlands’ ASML reaching exceptional levels of valuation and revenue. As argued by Terzis, for instance, this also reflects the interplay between the ‘structural’ hardware that gives shape to value-added activities and processes on the one hand, and the ‘functional’ software which drives demand for more computationally advanced hardware.
The initial EU Chips Act focused on the hardware question of semiconductors, and specifically, shortages that emerged because of the COVID-19 pandemic. In response to the ‘semiconductor crisis’, the Commission sought to mobilise €43 billion in investments. The Chips Act thus integrates a set of measures for monitoring and alerting of the semiconductor value chain, emergency measures that can be used to respond to crises, focusing on the coordination, focusing on the role of the Commission and the Member States in the context of monitoring and crisis response (Chapter IV). Similarly, and accompanying the 2022 proposal for the Chips Act, the Commission also issued a Recommendation to the Member States, stipulating immediate crisis response measures to address the shortage. The CA2P fills one gap: private sector engagement.
A Digital Twin for the Semiconductor Supply Chain: A Data Space?
As highlighted, the CA2P proposes the creation of the Platform as “a digital twin of the semiconductor supply chain with the objective of increasing its transparency and resilience”. This Platform, which is open to ‘domestic undertakings’ (defined in Art. 2(31) CA2P) only, should provide sufficient incentives for undertakings to participate through “the added value that they will obtain from the Platform’s output” (Recital 86 CA2P). At the same time, participation is made obligatory for ‘production facilities’ that are a part of European semiconductor technology initiatives (Art. 14(6)(e) CA2P), whereas the designation of ‘strategic projects’, which are recognised to provide significant added value to the Union and thus eligible for further support (defined in Art. 2(36) CA2P), may also be subject to an obligation to participate in the Platform.
But what will the Platform need to do in practice? In a nutshell, it is supposed to be a data sharing platform with a set of unique crisis preparedness features: a data space for semiconductors. Like data spaces, the Platform will gather data in an interoperable format (Art. 34(1)(b) CA2P). Like data spaces, it is geared towards undertakings operating along a supply chain, specifically the semiconductor supply chain (Art. 34(1)(d) CA2P). Further, akin to a prominent example of a data space – the European Health Data Space (EHDS) – it is intended to offer a ‘secure processing environment’ (or ‘SPE’, Art. 34(1)(h)). As outlined elsewhere, SPEs are a keystone legal concept aimed at preserving confidentiality of trade secrets and maintain personal data protection law, not just in the EHDS, but under the Data Governance Act re-use regime, as well as the Digital Services Act. The Platform’s SPE may be presumed to reconcile data gathering with other features of the Platform. Namely, the SPE may be tasked with the technical management of the collection of aggregated data for a ‘semiconductor market observatory’ (A...
Why not a ‘Common European Data Space for Semiconductors’?
While it may appear puzzling why the Platform is not designated as a data space per se, the general principles applicable to data spaces may still apply. The principal legal framework for data spaces, Art. 33 Data Act regarding essential requirements, is agnostic to a legal classification. As reflected in ongoing standardisation efforts, a ‘maturity model’ may serve to clarify when these rules apply. Further, regarding the specificities of the semiconductor industry, the Platform may also benefit from the existing work in the context of e.g. the common European manufacturing data space.
Without needing to settle the ‘should’ question, it is thus clear that the Platform canbe seen as a data space. Thinking about the Platform as a data space may offer the following opportunities for reflection about the nature of data spaces more generally:
- Data spaces as industry-specific data infrastructures: The Platform aims to generate higher-level aggregate data, which is only possible by including significant industrial players. Through the supportive measures that the CA2P utilises as a ‘carrot’, such aggregate insights may be especially made possible where legal obligations require participation in the Platform.
- Data spaces as sources of public value: related to the above, the Platform is proposed to provide a genuine new public value in the level of actionable policy insights (‘crisis preparedness’) which would be difficult or impossible to generate without the data space (in the case of the Platform: ‘preventive information gathering’ under Art. 38 CA2P). In this sense, the Platform also aligns with the rationale of the ‘exceptional need’ data sharing regime (cf. Erdogan and Verlee). Conversely, this raises questions regarding the public value provided by other data spaces.
- Data spaces as contributors to public interest objectives: finally, the Platform is clearly tied to overarching industrial policy objectives in the semiconductor context. Whereas other data spaces may struggle with adoption, clearly-articulated public interest objectives may serve to stimulate their uptake.
However the Platform evolves throughout the legislative procedure, it would certainly be an important contribution to the landscape of data spaces, with that label or without.