The bloc has presented its Chips Act 2.0, with stronger public procurement measures and accelerated approval processes among its key objectives.
The EU Chips Act, adopted in 2023, was designed to significantly strengthen Europe’s domestic semiconductor industry. Its headline goal was ambitious: doubling Europe’s share of global chip production to 20 percent by 2030. A key instrument was the provision of subsidies to support the construction of new semiconductor manufacturing facilities. However, the rollout of the Chips Act has faced criticism due to slow implementation, particularly following Intel’s withdrawal from several flagship European projects. While the European Commission argues that the legislation has already catalyzed €52 billion in investments and can therefore be considered a success, policymakers are now moving ahead with an updated framework. A draft of the Chips Act 2.0 was published on Wednesday as part of the broader Tech Sovereignty Package.
A Focus on the Entire Value Chain
Unlike its predecessor, the new initiative no longer concentrates solely on expanding manufacturing capacity. Instead, the EU aims to strengthen the entire semiconductor value chain, from raw materials to advanced packaging. The focus is also shifting toward the demand side of the market, with policymakers seeking to stimulate adoption of European-made chips. To connect manufacturers with potential buyers, the proposal introduces measures such as public procurement programs and long-term purchasing agreements. European start-ups and scale-ups are expected to be among the primary beneficiaries. At the same time, the EU intends to accelerate approvals and investment flows for strategically important technologies, particularly AI chips. State aid for innovative semiconductor projects across the supply chain—from materials and production to packaging—would be fast-tracked under the proposal. Additional measures include the introduction of a new excellence label for Europe’s leading semiconductor regions and the expansion of international partnerships with major global chip hubs.
The Road Ahead
Beyond Chips Act 2.0, the proposed legislative package contains measures aimed at reducing Europe’s dependence on the United States and China in critical technologies such as artificial intelligence and cloud computing. Before the package can take effect, it must secure approval from both the European Parliament and the Council of the European Union.
Photo: iStock / Ivan-balvan
