Unprecedented growth in the global semiconductor industry is revolutionizing multiple sectors worldwide. However, a select group of suppliers has created complexity in the supply chain, exacerbated by geopolitical uncertainties. To safeguard technological sovereignty, the European Commission is taking decisive action, including substantial economic support, to tackle potential shortages of next-generation microchips. The EU Chips Act is at the core of this effort, positioning the European Union as a major player in semiconductor production and reinforcing Europe’s leadership in digital sectors.

Europe’s unified market is a crucial advantage during this era of digital and ecological transformation. With competition from the Far East, particularly Taiwan and China, dominating the semiconductor industry, Europe’s strength lies in maintaining its technological edge. 

The European Commission is committed to enforcing strong competition policies to create a level playing field. Margrethe Vestager, Vice-President of the European Commission responsible for Competition, emphasizes leveraging the benefits of the single market. This vision was articulated during visits to Germany’s Silicon Saxony region, where Commissioner Thierry Breton outlined plans for it to become a hub for next-generation semiconductor production in Europe.

The European Commission has established two influential alliances: the Processor and Semiconductor Technologies Alliance and the European Alliance for Industrial Data, Edge, and Cloud. These alliances will strengthen Europe’s leadership in the next-gen microchips, industrial cloud computing, edge computing, and vital digital infrastructure. 

The EU Chips Act maps out a strategic path for semiconductor development until 2030, with over 43 billion euros in strategic investments and long-term private funding. The Act provides clear guidelines for investing in cutting-edge technologies, facilitates access to design tools, and establishes pilot lines for testing advanced chips. It also introduces certification procedures for producing reliable and energy-efficient chips.

The Act includes initiatives to create new roles for semiconductor researchers and engineers specialized in chip production processes. The plan prioritizes promoting skills, talent, and innovation in the microelectronics sector. President Ursula von der Leyen highlights the significance of attracting expertise to Europe and developing strong research and training programs both within Europe and abroad.    

Taiwanese companies, especially TSMC, have long dominated the global semiconductor market, holding a majority market share. This heavy reliance on a single company poses potential risks to national security and critical infrastructure. To mitigate these risks, the United States has enacted the Chips and Science Act, providing $52 billion in subsidies come with the condition of refraining from producing advanced chips for Chinese firms.