europe's semiconductor sector surges: eu chips act sparks market revival

2025-07-29 general

dublin, Tuesday, 29 July 2025.
the eu chips act is catalyzing a robust resurgence in europe’s semiconductor market. industry data reveals a striking 20% year-on-year surge in global semiconductor sales, reaching $281.3 billion in the first five months of 2025. this growth is primarily fueled by escalating demand for ai technologies and sustained expansion within the automotive sector. the eu chips act addresses critical supply chain vulnerabilities and aims to bolster emerging markets, including ai, quantum computing and iot.

eu commission’s strategic investments

The European Commission is actively supporting this growth through strategic investments. On July 26, 2025, the Commission unveiled the first projects to receive funding under the EU Chips Act [2]. These initiatives, which span multiple member states, are specifically focused on advancing semiconductor technologies [2]. Funding disbursements are projected to commence in the fourth quarter of 2025, marking a significant step toward realizing the EU Chips Act’s objectives [2]. Further calls for proposals are planned in 2026, emphasizing innovative chip design and manufacturing processes [2].

industry expert insights

Anne-marie Tierney-Le Roux, VP of Enterprise Technology at IDA Ireland, emphasized the importance of the EU Chips Act and national strategies in driving Europe’s technological advancement and economic growth [1]. A European Commission spokesperson stated that the selected projects are a significant stride toward achieving the EU Chips Act’s goals and strengthening Europe’s technological sovereignty [2]. These endorsements highlight the strategic importance of the EU Chips Act in revitalizing the European semiconductor industry and reducing reliance on foreign manufacturers [7].

market reactions and stock performance

The market has responded positively to these developments. European chip equipment stocks, including ASML, have seen gains [3]. ASML’s stock price increased by 3.5%, excluding a dividend of €1.6 per share [3]. Other companies also experienced gains: ASMI rose by 2.3%, BE Semiconductor by 4.4%, VAT Group by 2.2%, and Aixtron by 2.8% [3]. Chip manufacturers such as Infineon (1.8%) and STMicroelectronics (2.9%) also saw their stock values increase [3]. These gains reflect investor confidence in the sector’s growth potential, spurred by the EU Chips Act and related initiatives [1][3].

trade dynamics and geopolitical factors

The EU’s efforts to bolster its semiconductor industry are unfolding against a backdrop of shifting global trade dynamics. A recent trade agreement between the U.S. and the EU has eased concerns about trade wars, providing additional support to the sector after two weeks of declines [3]. However, some analysts suggest the EU’s reliance on U.S. technology and components remains a vulnerability [6]. Despite the EU Chips Act, advanced chip manufacturing still depends on U.S. technology licenses, and key components of ASML’s lithography machines are controlled by U.S.-dominated supply chains [6].

strategic focus and future outlook

To fully capitalize on the EU Chips Act, a collaborative and strategic approach is essential [7]. Member states should map their domestic semiconductor ecosystems and establish clear, long-term policy objectives [7]. Rather than solely focusing on increasing market share, the EU should prioritize building resilient capabilities and securing critical supply chain segments [7]. This approach ensures resilience and fosters innovation within the sector [7]. The EU Chips Act aims to double Europe’s global chip production share to 20% by 2030, backed by €43 billion in public and private investments [2][7].

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semiconductor market eu chips act