europe forges semiconductor alliance to challenge global chip dominance
Brussels, Wednesday, 12 March 2025.
nine european nations have united to form the semicon coalition. this initiative aims to fortify europe’s semiconductor industry. the coalition seeks to foster innovation and accelerate the commercialization of research. the goal is to achieve technological sovereignty in chip manufacturing. the european union will coordinate a joint strategy. this includes boosting production capacity and investing in research. a skilled workforce throughout europe will be developed. the eu chips act has a joint financing of € 43 billion available. this alliance marks a pivotal step towards european self-reliance in the global tech landscape.
Coalition details and member states
The ‘Semicon Coalition’ was established in Brussels through the initiative of the Dutch Minister of Economic Affairs, Dirk Beljaarts [1]. Nine countries have formally committed to bolster the European semiconductor industry [1][3]. Member states include Belgium, Germany, Finland, France, Italy, the Netherlands, Austria, Poland, and Spain [3]. This collaboration aims to foster innovation, expand Europe’s position in the semiconductor value chain, and accelerate the commercialization of research [1]. The coalition seeks to strengthen technological sovereignty, resilience, and strategic autonomy within the EU [1].
Strategic importance and market growth
Semiconductors are vital for modern economies, powering advancements in artificial intelligence, aerospace, defense, mobility, communications, and energy [1]. Strengthening Europe’s position in this sector is both an economic and strategic imperative for prosperity and security [1]. The global chip market is projected to grow by 9.5% this year, largely driven by demand for AI chips [2]. This growth underscores the importance of the Semicon Coalition’s objectives [2].
Germany’s leading role and setbacks
Germany is spearheading Europe’s chip ambitions, allocating billions in subsidies for new factories [2]. A key project is the European Semiconductor Manufacturing Company (ESMC), a joint venture involving TSMC, NXP, Infineon, and Bosch [2]. However, Intel’s decision to temporarily halt its mega-project in Magdeburg, despite €10 billion in reserved subsidies, has created uncertainty [2]. This has also impacted related projects in Poland and Italy, which are now on hold [2].
Revised ambitions and financial backing
The European investment surge in semiconductors was triggered by lessons learned during the COVID-19 crisis, which exposed the EU’s reliance on Asian chip manufacturers [2]. The EU launched a €43 billion subsidy plan in 2022 to attract foreign chip manufacturers [1][2]. The initial target of increasing Europe’s global chip production share from 8% to 20% is now viewed as unrealistic [2]. The Semicon Coalition advocates for a more pragmatic approach in the Chips Act’s successor [2].
Implications for investors
Investors should monitor the progress of the Semicon Coalition and its impact on European chip manufacturers like ASML and NXP [3]. Government subsidies and strategic collaborations could enhance the competitiveness and market value of these companies [1][2]. However, potential setbacks, such as project delays or revised production targets, could introduce volatility [2]. Staying informed about policy changes and market dynamics is crucial for making sound investment decisions in the semiconductor sector [1].