European Parliament pushes for Chips Act 2.0
The initiative should address investments in AI chips and other technological lags and strengthen Europe's competitive position.
Published on March 26, 2025
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Members of the European Parliament are calling on the European Commission to act quickly and launch the Chips Act 2.0. In a recent letter, they emphasized the need for more significant investment in AI chips and other semiconductor technologies, especially because of the increasing geopolitical tensions affecting supply chains. The letter follows a similar appeal from the European chip industry last week. Christophe Fouquet, CEO of ASML, also warned this week that the European chip sector must be better protected.
Failure to act quickly could result in the EU losing its relevance in the global semiconductor industry. Currently, Europe produces only 10% of the world's chips, far behind countries such as the US and Asia. This new legislation should focus on expanding R&D funding and attracting new investments to strengthen Europe's position in advanced semiconductor technologies. Parliamentarians warn that Europe could fall behind in the global technology race without an adequate strategy and resources.
Fouquet warns: 'EU needs to protect its champions better'
Christophe Fouquet warns that Europe could lose its leading companies if better protection is not provided.
Geopolitical pressure on the semiconductor market
While Europe currently accounts for only 10% of global semiconductor production, the urgency for a more substantial European presence is increasing. Major players such as the US and China are continuing their developments and rapidly increasing their investments in the semiconductor industry. There is increasing pressure due to geopolitical instability and dependence on foreign suppliers, particularly from Taiwan and the US, further complicates the situation. The new legislative initiative should promote strategic independence and strengthen Europe's role as a frontrunner by actively supporting advanced chip technologies.
Initiatives to strengthen R&D
One key to implementing the Chips Act 2.0 successfully is increasing subsidies for strategic partners such as TSMC and Intel. Although previous attempts have not effectively attracted companies, it is essential to emphasize the importance of a robust R&D infrastructure. With an emphasis on AI and high-performance computing (HPC) chips, the EU must adapt its policies to promote innovation within its borders. This also includes investments in public-private partnerships to stimulate research and development.
The new Chips Act 2.0 must implement significant changes to go further than its predecessor. Objectives include strengthening Europe's domestic semiconductor supply chains and promoting investments in AI chips and HPC. As the European Commission recently emphasized, it is essential to meet current geopolitical demands while supporting the green, digital, and defense transitions, which depend on a strong semiconductor ecosystem.
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Necessary economic security strategy
In light of increased global competition, as seen in the rivalry between the US and China, European policymakers emphasize the need to implement a robust economic security strategy. Without this strategy, European driving forces risk being influenced by extraterritorial challenges. By promoting technological leadership and building up production capacities and a strong R&D ecosystem, the EU aims to safeguard its sovereignty in times of increasing uncertainty.
Looking to the future, European policymakers face the challenge of effectively implementing the Chips Act 2.0 to prevent Europe from falling behind in the global technology race. Although the legislation has mobilized significant investments, such as the €80 billion demonstrated by the original Chips Act, the question remains whether future strategies will be sufficient to bring about substantial changes in the semiconductor industry. The emphasis on an integrated approach that addresses geopolitical and technological factors will be crucial for securing Europe's place in the global semiconductor arena.