EU seeks emergency power to seize control of chip supplies

The European Union wants new crisis powers. These would let it take control of computer chip supplies during a shortage, the Financial Times reported. Under the draft law, chipmakers could be forced to break deals they have already signed with customers.

The goal is to protect Europe from being cut off in a future shortage. Chips run everything from cars to weapons. The bloc still depends heavily on factories in Asia. Brussels wants the power to send production to where it decides the need is greatest.

The trade-off is real. A company ordered by the government to break a contract loses the trust that makes long-term supply deals work. Prices and planning rest on the idea that a signed deal will hold. When a regulator can rewrite the terms in an emergency, every buyer has to wonder if their order is safe.

This is industrial policy shifting from prices to government control. Instead of letting prices and supply adjust on their own, governments increasingly want the power to decide who gets scarce goods. The plan still needs approval. Chipmakers are likely to push back hard.