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The European Union’s policy on state aid for the production of semiconductors will seek to avoid a subsidy race, and companies must aim for diversification to ensure a robust supply chain across the bloc, the European Commission said on Thursday.

“Each case for the supply of semiconductors will be rigorously assessed based on their respective merits, so as to ensure that a project has a European nature and of course avoid a subsidy race within the union and beyond,” European Commission for Competition Magrethe Vestager told a news conference.

She said self-sufficiency is “an illusion” and, given the scale of what is needed, no country or company can provide it alone.

“That is why the aim should be a diversification among like-minded partners to build a resilient supply chain and to avoid single points of failure,” she said.

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