eu prepares chip act 2.0 amid tariff threats

2025-03-28 general

brussels, Friday, 28 March 2025.
The European Union is considering a second iteration of the European Chip Act. This move is a direct response to potential semiconductor tariffs from the United States under a possible Trump administration. The original act, with a budget of €43 billion, aimed to bolster the eu’s semiconductor industry. Despite not fully achieving its goals, it is seen as preventing further decline in the european chip market. The eu is determined to enhance its chip-making capabilities in the face of increasing global competition. Nine countries are collaborating on recommendations for new chip support initiatives.

eu digital chief’s perspective

Henna Virkkunen, the eu’s digital chief, stated that the european union is exploring further means to support its semiconductor industry [1]. This comes amid calls from industry groups and european parliamentarians for a ‘chip act 2.0’ [1]. Virkkunen noted that the initial chip act did not meet all its intended targets, necessitating further action [1]. She also acknowledged strong support for a follow-up initiative [1]. The eu commission plans to launch five new packages this year to stimulate european ai investment [2].

industry calls for supply chain enhancements

Lobbying groups are advocating that the ‘european chip act 2.0’ should focus on strengthening supply chains [1]. They want to address gaps in advanced chip manufacturing and packaging [1]. These groups also seek to build upon existing strengths in chip equipment manufacturing [1]. Petri Räsänen, Director at Business Tampere, supports the ideas for EU Chips Act 2.0 [3]. He advocates for a market-driven chip ecosystem with a central role for demand-side policy and the inclusion of defense [3].

global competition and strategic alliances

The eu’s push for semiconductor independence aligns with similar initiatives in the united states and china [1]. Räsänen emphasizes the necessity of strategic alliances for international cooperation in the semiconductor value chain [3]. He also suggests that the strict separation between dual-use and non-dual-use research funding is outdated and that more cooperation is needed [3]. This reflects a broader trend of nations seeking to secure their access to critical technologies [7].

semicon coalition and european investment

Nine european countries launched the semicon coalition in brussels on march 12, 2025 [4]. This coalition includes austria, belgium, finland, france, germany, italy, poland, spain, and the netherlands [4]. The european commission is dedicated to furthering the eu’s digital transformation goals [5]. These goals are defined in the communication 2030 digital compass [5]. The digital europe programme’s work programme for 2025-2027 reflects the political priorities of tech sovereignty, democracy, and security [5].

potential impact of trump tariffs

Donald trump has threatened to impose tariffs on imported semiconductors [1]. This move aims to pressure chipmakers to establish manufacturing facilities in the united states [1]. Martin Chorzempa argues that scrapping the us chips act would threaten current microchip investment [6]. He suggests the trump administration should instead make the legislation’s funding more targeted and efficient [6]. The eu’s proactive measures suggest a preparedness to navigate potential trade disruptions and maintain a competitive edge in the semiconductor market [1].

investment perspective

From an investor standpoint, the ‘european chip act 2.0’ signals a long-term commitment to the semiconductor sector [1]. Companies involved in chip manufacturing, equipment supply, and related r&d could see increased opportunities for funding and growth [4][5]. However, potential tariffs and trade tensions introduce uncertainty [1]. Investors should closely monitor policy developments and geopolitical factors impacting the semiconductor industry [6]. Prioritizing companies that are building a resilient value chain within the EU is important [3].

Bronnen

trade tariffs eu policy