european chips act faces scrutiny: ambition versus reality

2025-05-04 general

luxembourg, Sunday, 4 May 2025.
the european court of auditors has cast doubt on the european chips act’s effectiveness. a recent report highlights a ‘disjointed and lacklustre performance,’ with concerns raised about achieving the ambitious goal of 20% of global chip production by 2030. the report suggests current investment levels and policy execution are insufficient. global chipmakers’ investments dwarf europe’s efforts, with over €400 billion invested in asia and the u.s. alone. this raises questions about europe’s competitiveness in the semiconductor industry.

investment outlook

The European Chips Act, proposed in February 2022, aimed to increase Europe’s global chip production share to 20% by 2030 [1]. This target is an increase from approximately 10% at the time of the Act’s proposal [1]. However, the European Court of Auditors has deemed it ‘very unlikely’ that the EU will achieve this goal [4]. Concerns surrounding the act’s disjointed implementation and structural barriers may deter investors [1][3]. These barriers include high energy costs and reliance on imported materials [3].

Of the estimated €86 billion in funding for the Chips Act until 2030, the European Commission directly commits only €4.5 billion [1]. The remaining funds rely on contributions from member states and private firms [3]. This decentralized funding model, coupled with slow project deployment, is considered a key obstacle [3]. Forecasts suggest Europe’s global chip market share may only reach 11.7% by 2030, falling short of the 20% target [3]. This shortfall could negatively impact investor confidence and stock valuations of European semiconductor companies.

skills shortage and geopolitical factors

A significant skills shortage further complicates the outlook for the European semiconductor industry [5]. Europe faces a shortfall of over 75,000 technical roles, with critical gaps in hardware engineering and technician positions [5]. Geopolitical instability also poses a risk [3]. Annemie Turtelboom, an ECA Member, stated that the EU urgently needs a ‘reality check’ in its microchips sector strategy [1]. These factors collectively suggest a cautious approach for investors in european semiconductor ventures.

recent industry developments

Recent developments highlight the ongoing efforts to advance semiconductor technology [2][7]. Researchers in South Korea and the U.S. have discovered a new operational mechanism within Electrochemical RAM (ECRAM) [2][7]. This discovery could potentially aid AI computation [7]. Furthermore, European RISC-V core developer Codasip has developed an FPGA-based exploration platform integrating CHERI technology [7]. While these advancements are promising, they may not be enough to offset the challenges identified in the European Court of Auditors’ report regarding the Chips Act [1].

Bronnen

european chips act semiconductor policy