European Union nations have supported the European Commission's proposal to boost the domestic production of semiconductors amid a global shortage. 

The deal was backed by EU ambassadors, people familiar with the matter told Reuters.

This is the latest move in the saga of the European Chips Act, unveiled earlier this year, which aims to bolster European competitiveness and resilience in semiconductors, with a target of doubling the current market share of the EU to about 20 per cent of global semiconductor production by 2030.

Currently, Europe manufactures 8 per cent of the global share of semiconductors. 

The agreement would expand the scope of the chip plants considered “first-of-a-kind” and which qualify for state aid, but stops short of allowing all automotive chips to qualify for funds, which some countries had demanded earlier this year. 

The latest version of the legislation also adds more safeguards for when the EU’s executive arm can trigger...