eu chip ambitions face funding shortfall: industry urges 4x budget increase

2025-05-08 general

Brussels, Thursday, 8 May 2025.
the eu’s plan to capture 20% of the global chip market by 2030 is in jeopardy. semiconductor equipment and materials international (semi) is calling for a bold move: quadruple the eu’s chip spending and create a dedicated budget. this would mean an increase to €20 billion. current eu commission investments stand at just €4.5 billion of the €43 billion ‘chips act’. without this, the eu risks falling far short, potentially reaching only 11.7% market share by 2030.

Investment landscape

The eu is consulting with industry stakeholders for its long-term spending plans from 2028 to 2034, with a budget announcement expected in july [1]. semi’s proposal could unlock over €260 billion in combined public and private investments [1][3]. a dedicated eu budget aims to create a level playing field, as member states currently prioritize their own national industries [2]. this centralized approach could accelerate the eu’s industrial development and reduce reliance on non-european suppliers [3].

The challenge of current funding

the european court of auditors (eca) indicated the eu is unlikely to meet its 20% market share target by 2030 at the current pace [2][3]. annemie turtelboom, the eca member in charge of the audit, stated the eu needs a ‘reality check’ and should reassess its long-term strategy [7]. the eca also noted a lack of clarity in the chips act’s targets and monitoring [7]. key challenges include dependency on raw material imports, high energy costs, and a shortage of skilled workers [7].

Gaps in technology

semi has flagged key technology gaps in areas such as advanced process chips, ai semiconductors, and quantum computing [1][3]. these are sectors where europe currently lags behind global competitors [3]. the eu chips design platform, launching with twelve european partners coordinated by imec, aims to address some of these gaps [8]. the project, running from 2025 to 2028, will onboard its first users by early 2026 [8].

Market impact and stock considerations

stmicroelectronics reported net revenues of $2.52 billion for q1 2025, a -27.378 or 27.3% year-over-year decrease [8]. the company expects q2 2025 net revenues to reach $2.71 billion, a 7.54 or 7.7% sequential increase [8]. however, stmicroelectronics is withholding fy2025 revenue guidance, citing economic uncertainty [8]. nxp semiconductors ceo kurt sievers noted operating in a ‘very uncertain environment’ due to tariffs [8].

us comparison

the us chips and science act of 2022 allocated $39 billion for manufacturing grants and $11 billion for r&d and workforce development [7]. tsmc plans to expand its investment in the u.s. by an additional $100 billion, including plans for three new fabs [7]. while the u.s. aims to increase its share of global fab capacity from 10% to 14% by 2032, the eu faces challenges in meeting its own targets [7]. the us is expected to grow fab capacity for advanced logic processes from 0% in 2022 to 28% by 2032 [7].

Bronnen

eu chips act semi spending