european chips act faces reality check after €80 billion investment

2025-05-06 asml

Luxembourg, Tuesday, 6 May 2025.
the european court of auditors casts doubt on the european chips act’s ambitious goals. despite an €80 billion investment, the eu is unlikely to reach its target of 20% global market share in semiconductor production by 2030. instead, a more realistic projection places the eu at only 11.7%. high energy prices and shortages of raw materials are major obstacles. the court of auditors calls for a ‘reality check’ and a shift towards innovation and ip development to adapt to dynamic market conditions. this shortfall could impact major players like asml.

Impact on asml’s market position

ASML, a critical supplier of lithography systems for semiconductor manufacturing, faces potential headwinds due to the revised projections of the European Chips Act [1]. ASML’s ability to expand within the EU could be limited if the region fails to attract significant semiconductor manufacturing capacity [1]. Vishal Gupta, an industry expert, noted that the high costs of establishing new factories in the EU, the absence of a leading semiconductor company to drive the industry, and strict regulations pose barriers to growth [1]. This could affect ASML’s order book and future revenue streams derived from European expansion [alert! ‘need more data on order book specifically’].

technological leadership and innovation

The European Court of Auditors emphasizes the need for a pragmatic and flexible approach that focuses not only on production but also on innovation, patents, and IP development [1]. The EU is currently lagging in crucial technologies such as advanced chips for data centers and AI applications [1]. To address this, the EU Chips Design Platform was launched on May 4, 2025, aiming to support fabless semiconductor start-ups and SMEs by providing access to design infrastructure, training, and capital [5]. This platform could foster innovation and potentially create new opportunities for ASML to collaborate with emerging European chip designers [5].

global competition and strategic autonomy

The European Chips Act aimed to boost Europe’s technological sovereignty, competitiveness, and resilience [2]. Nicolas Babin stated that the Chips Act is a bold step toward technological sovereignty, industrial resilience, and strategic autonomy [3]. However, the European Court of Auditors’ report highlights the challenges in achieving these goals [1]. The EU’s reliance on China for legacy chips and a significant semiconductor trade deficit raise concerns about economic security [4]. As the EU and the U.S. investigate potential dependencies and unfair pricing, ASML’s strategic positioning becomes crucial in navigating the evolving global semiconductor landscape [4].

us initiatives and european response

In response to global competition, the U.S. House of Representatives introduced the Building Advanced Semiconductors Investment Credit (BASIC) Act, aiming to increase the investment tax credit rate from 25% to 35% and extend its availability [4]. Congresswoman Claudia Tenney emphasized the importance of empowering American companies with the tools they need to succeed [4]. Meanwhile, the European Commission’s revised forecast projects only an 11.7% market share by 2030, underscoring the need for a revised strategy [4]. The European Court of Auditors suggests that the EU would benefit from a long-term strategy with clear priorities and concrete actions [1].

Bronnen

chips act european union