EU Launches "Chips Act 2.0" to Revitalize Semiconductor Ambitions Amid 2030 Goal Doubts
The European Union is preparing a strategic upgrade to its semiconductor policy through the introduction of the “EU Chips Act 2.0”, aiming to address mounting concerns over the bloc's ability to meet its 2030 chip production targets. The original Chips Act, which came into effect in 2023, set the ambitious goal of doubling Europe’s share of global semiconductor production to 20%. However, industry insiders and auditors now warn that this target is unlikely to be reached without major structural changes.
The European Union is preparing a strategic upgrade to its semiconductor policy through the introduction of the “EU Chips Act 2.0”, aiming to address mounting concerns over the bloc's ability to meet its 2030 chip production targets. The original Chips Act, which came into effect in 2023, set the ambitious goal of doubling Europe’s share of global semiconductor production to 20%. However, industry insiders and auditors now warn that this target is unlikely to be reached without major structural changes.
Reality Check: 2030 Target at Risk
Under the original Chips Act, the EU pledged €43 billion in public and private investment, including €3.3 billion directly from the EU budget. The plan also included the launch of a “Chips Fund” to support startups and coordinated state aid policies across member states. Major projects such as Intel’s €33 billion fab in Germany and TSMC’s joint venture with Bosch in Dresden are part of the initiative to localize chip manufacturing.
Despite these efforts, the European Court of Auditors (ECA) recently estimated that Europe’s global market share will only reach 11.7% by 2030, citing delayed subsidies, a lag in advanced process development (e.g., 2nm nodes), high energy costs, and overreliance on imported materials. Several projects have faced delays or cancellations due to these issues.
Chips Act 2.0: What's Changing?
With Chips Act 1.0 falling short, policymakers are preparing a second iteration of the legislation, set to be included in the EU’s 2028–2034 budget framework. The Semiconductor Equipment and Materials International (SEMI) association has recommended the EU allocate €20 billion exclusively for the semiconductor supply chain, urging a separate budget line to ensure equitable support across all member states.
Key policy recommendations include:
Clear, time-bound goals
Dedicated and scalable funding mechanisms
Legal revisions to address global competitive pressures
Emphasis on European industrial sovereignty, leveraging core strengths like ASML’s EUV lithography and Carl Zeiss’s optical systems.
European Semiconductor Coalition: Unity in Action
In a push toward collective progress, nine EU countries—Germany, France, Netherlands, Belgium, Finland, Italy, Austria, Poland, and Spain—have signed a cooperation agreement to form the “Semicon Coalition.” The alliance targets three main strategic areas:
Technological Sovereignty – Focus on sub-2nm nodes, next-gen semiconductors, and AI hardware.
Supply Chain Resilience – Increase domestic chip production for key sectors, such as automotive, aiming for 50% local production.
Innovation Competitiveness – Strengthen university-industry partnerships to accelerate R&D commercialization.
Outlook: Will the EU Catch Up?
While the EU’s semiconductor strategy has faced headwinds, Chips Act 2.0, alongside enhanced international cooperation and better coordination of resources, signals a strong commitment to regaining control over critical technologies. By combining regulatory upgrades, deeper integration across member states, and leveraging its industrial champions, Europe seeks to build a resilient and globally competitive semiconductor ecosystem.
