As AI investment surges around the world, European chipmakers are lobbying the region’s leaders to update the 2023 Chips Act to enable greater competitiveness for the European chip sector in the global market.
The 2023 Chips Act was a well-intentioned — if not entirely successful — effort to advance chip manufacturing in the Eurozone. The Act did spur significant levels of investment in chip manufacture. Yet the overall semiconductor supply chain wasn’t supported enough to enable European chip makers to become a top international resource. Among the Chips Act’s chief difficulties was a reliance on legacy European bureaucracy: New chip initiatives required EU approval and so the process was slowed considerably.
To improve their fortunes, the European Semiconductor Industry Association (ESIA), SEMI Europe and a cohort of semiconductor manufacturers gathered for a recent event at the European Parliament. The technologists voiced strong support for an initiative informally known as Chips Act 2.0, whose aim is to assist the Euro-based chip industry throughout its supply chain and adopt policies to attract greater investment.
The larger goal is to strengthen a European high-tech sector that’s falling behind as the US and China compete aggressively to be the dominant global player in the AI-based economy.
After the Parliament event concluded, the chip industry representatives announced that they will present their plans to Henna Virkkunen, an executive VP of the European Commission focused on technology. The SEMI Europe group said that a next-gen Chips Act should “decisively support semiconductor design and manufacturing, R&D, materials and equipment.” As part of this support, vendors in the chip sector should receive subsidies to enhance the sector’s competitiveness.
This call for greater support reflects both the quickening pace of competition in the tech sector and new geopolitical tensions. “Trump has shocked Europe into realizing it has to build its own ‘domestic’ semiconductor capability,” said Richard Gordon, vice president and practice lead of semiconductors, The Futurum Group.
Gordon is skeptical about the Eurozone’s capacity to compete. “The EU will grandstand about competing at the leading edge with the US and China/Taiwan, and they will point to ASML as evidence to support those claims, but I think it will struggle due to structural impediments, bureaucracy and over-regulation.”
But clearly the region is taking steps to create a more competitive stance. The European Commission’s Henna Virkkunen in February announced that the Commission will propose at least five sets of legislation this year to simplify regulation and prompt greater investment, focusing on artificial intelligence (AI), biotech and clean energy.
“I personally think that we have too much of a heavy administrative burden and bureaucracy,” Virkkunen told Reuters. The proposed legislation “will cut down on the extra bureaucracy, above all in order to promote investment and innovation in Europe.” One of the packages, she said, is intended to clarify the thicket of regulations created by existing legislation, including the EU AI Act, the Digital Services Act and the GDPR (General Data Protection Regulation). Currently, companies need to navigate complying with the overlap between these various acts, a torturous process that greatly impedes innovation.
To further boost competition, nine European countries launched the Semiconductor Coalition to facilitate cooperative support for the region’s chip sector.
