Chips Act 2.0: can euro firms regain lost ground?
Brussels, Friday, 21 March 2025.
European semiconductor companies are pushing for ‘Chips Act 2.0’, seeking to reverse a 40-year decline in global chip market share. Industry leaders are calling for a broader strategy, addressing supply chain vulnerabilities and investment shortfalls. The initial Chips Act, while providing €43 billion in funding, faces implementation hurdles. A revised act aims to extend beyond manufacturing, including chip design and material advancements. Can this initiative revitalize Europe’s position in the competitive semiconductor landscape?
Industry leaders unite for change
Leading European semiconductor firms and industry groups like SEMI Europe and ESIA convened at the European Parliament to advocate for a ‘Chips Act 2.0’ [1][4]. Following the roundtable, a joint declaration was sent to Henna Virkkunen, the European Commission’s Executive Vice President for Tech Sovereignty, Security and Democracy [1]. This declaration emphasized the need for a follow-up to the original Chips Act [1]. The goal is to broaden the scope beyond manufacturing to include design, materials, and equipment [4]. Tech firms such as Infineon, Bosch, NXP, STMicroelectronics, and ASML participated in the discussions [1].
The shortcomings of the initial chips act
The initial EU Chips Act, finalized in 2023, allocated €43 billion [1]. However, it faced criticism for being too slow in approving projects and for not attracting cutting-edge chipmakers [4]. Most of the funding came from member states, requiring EU approval, which slowed progress [4]. The industry is pushing for faster administrative procedures to ensure the efficient deployment of resources [1]. A revised act should decisively support semiconductor design and manufacturing, R&D, materials, and equipment [4].
Expert opinions and market impact
Richard Gordon, Vice President at The Futurum Group, expressed skepticism about the EU’s ability to achieve substantial results, citing red tape and challenges in dealing with global trade policies [1]. Despite these concerns, the push for ‘Chips Act 2.0’ reflects the industry’s determination to strengthen Europe’s semiconductor ecosystem [1]. Oliver Schenk, a Member of the European Parliament, highlighted the need for subsidies to strengthen the fab ecosystem [7]. He noted the absence of European chemical companies alongside major players like TSMC in Europe [7].
Strategic priorities and investment
The European Commission aims to increase its share of global chip production to 20% by 2030, a significant increase from the current 10% [3]. To achieve this, the EU should prioritize boosting competitiveness, enabling sustainable growth, driving innovation, and promoting global collaboration [3]. The Commission is investing over €43 billion to support the Chips Act until 2030 through programs like Horizon Europe and Digital Europe [5]. This investment targets next-generation technologies and provides access to design tools and pilot lines for prototyping and testing [5].
Implications for investors
The push for a ‘Chips Act 2.0’ signals a long-term commitment to revitalizing Europe’s semiconductor industry [1]. For investors, this translates to potential opportunities in European semiconductor companies like Infineon, ASML, and STMicroelectronics [1]. However, investors should be aware of potential challenges, including bureaucratic hurdles and global trade uncertainties [1]. The success of the ‘Chips Act 2.0’ will depend on the EU’s ability to streamline administrative processes and create a supportive environment for innovation and investment [4].