| Hey there, it's Jillian in Brussels. The EU's scoring goals with semiconductors faster than Brussels would normally be expected to. But first... Today's must-reads: • Apple's facing a deficit of 6 million iPhone Pros
• Amazon's closing some of its India businesses
• Veteran fund manager sees Bitcoin falling to $10,000 Protests in Chinese manufacturing hubs such as Zhengzhou will be creating headaches equally for Apple executives observing their impact on iPhone manufacturing, and President Xi's lieutenants overseeing relationships with key export markets. One of which is Europe, where lawmakers are trying to ease the bloc's reliance on Chinese manufacturers for key electronic components, such as semiconductors. Often, EU policies are out of date by the time they're made law. But for once, the plan to entice chipmakers to build factories in the region is paying off. Intel, STMicroelectronics, GlobalFoundries and Infineon have already announced plans to build four separate semiconductor production facilities across the union. TSMC, the world's premier chip foundry, is still in talks with the German government to build another, Bloomberg has been told. These developments came after the European Commission, the EU's executive arm, paved the way for chipmakers to receive unprecedented state funds to build production sites as part of its EU Chips Act. The plan, proposed earlier this year to rival a similar one from the US, promises around €43 billion ($45 billion) in funding for research, pilot lines and state aid for production. EU countries passed their amended version of the plan last week. While a final deal—only agreed after negotiations between EU countries, the European Parliament and the commission—isn't likely until some time next year, the Chips Act has remained a political priority with company buy-in. Every sign pointed to the plan being deprioritized this year, especially as the months grew colder. The continent is facing high inflation, skyrocketing energy bills (mine quadrupled) and a looming recession. National budgets are tight after years of pandemic spending, and now in the middle of an energy crisis, countries like Germany are borrowing billions to keep the lights on. The EU's budget—made up of member state contributions allocated in seven-year stints—is also overstretched. In their plan, EU countries rejected reallocating €400 million from the research budget to semiconductors, arguing that the money would only benefit countries with larger existing chip industries. Eva Maydell, who is leading the Chips Act package through the parliament said that while the Chips Act contains "big ideas," it also needs "deep pockets." "I am concerned that some of the public funds may not materialize in these stretched times," she said. Not to mention chipmakers watched their long market boom finally wane. Last month, we saw company after company report disappointing earnings. Demand for items like PCs has already slowed and companies worry the situation will worsen when faced with a recession. US restrictions on operations in China have also seriously hit chipmakers like Nvidia and Applied Materials. Companies are tightening their belts. But after the war in Ukraine, becoming less reliant on third countries for such important tech is crucial for Europe. The Chips Act is winding its way through the Brussels machinery at a time when the commission and European countries are increasingly concerned about dependence on other countries for critical items and infrastructure. The US, Japan and South Korea have already signed off massive investments into the industry. For politicians, the need to decouple and compete with the rest of the world has trumped any budget or market fears. "I think the problems we're getting through at this moment—I mean, we're in the middle of a war in Europe—I think it just illustrates even more than ever before how strategic and how important" semiconductors are, Imec Chief Executive Officer Luc Van den hove told me in an interview last month. He's backed by the EU's internal market chief Thierry Breton who told me earlier this semester that whatever the market demand is now, the EU needs to move forward with its plan: "We don't do this for the market now," he said, "we do this for the next 10 years." Chipmakers are also focused on sourcing more of their chips from the West rather than Asia, as signs point to the tech battle between China and the US only worsening after Washington's latest round of curbs. Companies including Apple are. Apple said it's likely to get more of its chips from Europe (especially if TSMC sets up shop on the continent.) This doesn't mean Europe is on track to become the world leader in producing semiconductors. Longstanding criticism about the Chips Act very much still holds: The promised €43 billion is a number cobbled together from estimates about how much EU countries will provide in state aid and a skimp amount of EU funds pulled from every budget line's pockets. The EU's investments are a drop in the bucket compared to the amounts the US is able to subsidize or governments like South Korea can promise. Even if the EU does get all the projects it wants, Europe is very unlikely to meet its goal of producing 20% of the world's chips by 2030. The EU's progressing Chips Act is unlikely to make Europe a semiconductor powerhouse, but it's a start—and going faster than Brussels is infamous for.—Jillian Deutsch Turmoil at Apple's key manufacturing hub of Zhengzhou is likely to result in a production shortfall of close to 6 million iPhone Pro units this year, according to a person familiar with assembly operations. Foxconn is offering $1,800 bonuses to workers who stay in iPhone city The Bahamian government blasted the person in charge of restructuring crypto exchange FTX Dropbox CEO Drew Houston recalls his infamous meeting with Steve Jobs, in this Bloomberg podcast | 
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