eu chips act faces reality check as auditors question feasibility

2025-04-28 asml

luxembourg, Monday, 28 April 2025.
The European Court of Auditors has cast doubt on the EU’s ambitious Chips Act. The auditors suggest the EU’s goal of achieving 20% of global chip production by 2030 is unlikely. Intense global competition and internal challenges hinder progress. The EU may only reach 11.7% market share by 2030, despite allocating €86 billion. Auditors urge a strategy rethink as major players dwarf EU investment. This shortfall could significantly affect companies like ASML, crucial to EUV lithography.

asml’s pivotal role and market leadership

ASML is a key beneficiary of the EU Chips Act, alongside industry giants like Intel and TSMC [1]. These funds are crucial for ASML to maintain its technological advantage in EUV lithography [GPT]. The company’s market position and ability to fulfill its order book depend heavily on continued European investment and policy support [1]. ASML’s technological leadership directly impacts its stock performance and long-term growth prospects. If the EU fails to meet its objectives, ASML’s expansion plans and overall market presence could face significant headwinds.

challenges to eu chip act ambitions

Several factors contribute to the EU’s struggle to achieve its goals. High energy costs, shortages of raw materials, and lengthy planning procedures impede progress [4][7]. Geopolitical tensions and export bans further complicate the situation [4]. Annemie Turtelboom from the ECA described the EU’s targets as “disconnected from reality” [1][4][5]. She also pointed out a “data problem,” where EU countries aren’t obligated to inform the Commission about industrial projects [4]. This lack of coordination and information hinders effective strategy implementation.

financial discrepancies and global competition

The financial commitment from the European Commission constitutes only 5% (€4.5 billion) of the total €86 billion earmarked for the Chips Act by 2030 [3][7]. The remaining funds are expected from member states and industry contributions [7]. However, global competitors invested significantly more between 2020 and 2023, with budgets reaching €425 billion [1]. This vast difference in financial firepower puts the EU at a disadvantage. China is projected to manufacture 22% of the world’s chips by 2030, while the EU is forecast to manufacture only 8% [5].

expert opinions and recommendations

The ECA recommends the European Commission conduct a “reality check” and take corrective actions [3]. Annemie Turtelboom emphasized the need for the EU to reassess its strategy to match the reality on the ground [3][6]. The commission should also prepare a new semiconductor strategy, potentially a “Chips Act 2.0” [3]. These recommendations reflect concerns about the feasibility of the EU’s current approach and the need for a more pragmatic and coordinated effort. The EU executive has a legal obligation to evaluate the Chips Act by September next year [7].

market implications for asml

The auditors’ report raises concerns about ASML’s future prospects [1]. ASML depends on European investment and policy support to maintain its technological edge [1]. A failure of the Chips Act could negatively impact ASML’s order book and market position. Investors may react cautiously to the news, potentially affecting ASML’s stock performance. The company’s ability to innovate and expand its EUV lithography technology could also be hindered [GPT]. ASML’s reliance on a successful EU Chips Act makes it vulnerable to the plan’s potential shortcomings.

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Semiconductor Manufacturing EU Chips Act