eu chip act faces uphill battle to double market share by 2030, auditors say

2025-04-29 general

Luxembourg, Tuesday, 29 April 2025.
The EU’s ambitious plan to grab 20% of the global microchip market by 2030 is in peril. The European Court of Auditors warns that the current strategy is underfunded and uncoordinated. The EU has allocated €86 billion to the project. This pales in comparison to the €405 billion invested by leading semiconductor companies between 2020 and 2023. This raises concerns about Europe’s competitiveness in the global chip race and its potential impact on key players like ASML and TSMC.

funding disparities and strategic concerns

The European Court of Auditors (ECA) highlights that the EU’s funding is significantly less than the investments made by global semiconductor leaders [1][3]. The EU’s share of the global microchip market was 9.8% in 2022 [1][3]. The aim of the EU Chip Act was to reach 20% by 2030 [1][3]. Annemie Turtelboom, the ECA Member in charge of the audit, stated that reaching the 20% target would require the EU to quadruple its production capacity by 2030 [7]. She added that the current rate of progress is insufficient [7]. This raises concerns about the feasibility of the EU’s goals and its potential impact on companies crucial to the European market [1].

lack of coordination and unclear objectives

The EU Chips Act lacks a centralized, EU-wide investment coordination mechanism [1][3]. The objectives and monitoring of the Act also lack clarity [1][3]. The Act’s goals may not accurately reflect the electronic industry’s current demand for mainstream microchips [1][3]. This deficiency in coordination and clarity could lead to inefficient allocation of resources and missed opportunities for strategic investments [1]. Investors may view this lack of direction as a potential risk, impacting the attractiveness of European semiconductor ventures [1].

challenges to eu chip act goals

The EU faces multiple obstacles in achieving its goals. These include reliance on external sources for raw materials, high energy costs, environmental protection concerns, geopolitical factors, and a shortage of skilled labor [1][3]. The concentration of the EU microchip industry among a few large companies means that problems with a single project could significantly affect the entire sector [1][3]. Investors should be aware of these systemic risks [alert! ‘These are known risks to investment in the EU microchip industry.’].

revised strategies and market impact

The European Commission is expected to present its first intermediate evaluation and review of the Chips Act to the European Parliament and the Council by September 2026 [7]. The EU Commission forecasts that the EU’s overall share of the global value chain will only increase to 11.7% by 2030 [7]. This is significantly short of the 20% target [7]. Analysts suggest the EU needs to reassess its long-term strategy to align with current realities [7]. Failure to meet targets could negatively impact investor confidence and potentially lower stock valuations for European semiconductor companies [alert! ‘lower stock valuations could occur because of failure to meet targets.’].

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EU Chip Act Market Share