Europe’s Semiconductor Industry Demands Overhaul of Chips Act 2.0 Amid Fears of Losing Competitiveness
- Why Is Europe’s Semiconductor Industry Calling for Reform?
- What Changes Does SEMI Europe Want?
- How Does This Compare to U.S. and Asian Strategies?
- What’s at Stake for Europe’s Tech Future?
- When Will Reforms Take Effect?
- Could This Spark a Transatlantic Subsidy War?
- What’s the Industry’s Verdict?
- Bottom Line
Europe’s semiconductor sector is pushing for a major revision of the Chips Act 2.0, warning that without urgent reforms, the region risks falling behind global rivals like the U.S., China, and South Korea. SEMI Europe, a key industry group, has proposed €20 billion in funding for R&D, streamlined state aid approvals, and a single regulatory contact point to boost innovation and production capacity. The EU plans to finalize updates by March 2026, but critics argue current rules are too restrictive. Meanwhile, the U.S. Chips and Science Act has already committed $52.7 billion in subsidies, intensifying the global race for chip dominance.
Why Is Europe’s Semiconductor Industry Calling for Reform?
Europe’s semiconductor industry is sounding the alarm: without a revamped Chips Act 2.0, the region could lose its footing in the global tech race. SEMI Europe, representing equipment suppliers and designers, argues that current EU rules stifle innovation by limiting state aid to only “groundbreaking” projects. Their proposal? A faster, simpler approval process for strategic investments—think pilot production lines or quantum chip development—backed by €20 billion in fresh funding. “The current framework is like trying to win a Formula 1 race with a bicycle,” quipped one Brussels insider.
What Changes Does SEMI Europe Want?
The wishlist is bold:
- Money talks: €20 billion earmarked for advanced manufacturing, R&D, and pilot lines—doubling down on existing initiatives like the Chips for Europe program.
- Red tape be gone: Binding deadlines for regulatory approvals (no more “we’ll get back to you in 18 months”).
- One-stop shop: A dedicated EU Commission desk for semiconductor projects—because navigating 27 bureaucracies isn’t fun.
How Does This Compare to U.S. and Asian Strategies?
While Europe debates, others are sprinting ahead. The U.S. Chips and Science Act (2022) has already greenlit $52.7 billion in subsidies for Intel, Samsung, and Micron. China’s pouring $150 billion into its chip self-sufficiency drive. Even Taiwan and South Korea are offering tax breaks worth 25-30% of R&D costs. “Europe’s playing catch-up,” admits a SEMI advisor. Case in point: ASML, Europe’s chip equipment crown jewel, now sells 90% of its EUV machines to Asia.
What’s at Stake for Europe’s Tech Future?
It’s not just about chips—it’s geopolitical leverage. The pandemic exposed Europe’s reliance on Asian imports (75% of chips came from abroad). The new Act aims to:
- Secure supply chains for AI accelerators and quantum computers
- Prevent “brain drain” to better-funded U.S. labs
- Counter China’s rising influence in legacy chip markets
When Will Reforms Take Effect?
Mark your calendars: the EU expects to publish draft updates by March 2026 after a public consultation. Key focus areas include loosening state aid rules—currently, France and Germany dominate subsidies (€8 billion combined), leaving smaller nations fuming. The Commission hints at “flexible financing” for both new fabs and upgrades, but details remain hazy. “They MOVE slower than a 90nm processor,” jokes an industry lobbyist.
Could This Spark a Transatlantic Subsidy War?
Quite possibly. The U.S. has already poached €100 billion in European chip investments since 2022 (see Intel’s German mega-fab). Brussels fears a “subsidy spiral” but can’t afford inaction—TSMC’s Arizona plant got $6.6 billion in U.S. grants. “It’s like poker,” says a BTCC market analyst. “Europe’s holding a pair of twos while others go all-in.”
What’s the Industry’s Verdict?
Mixed reactions. STMicroelectronics cheers the €20 billion proposal, while startups worry it’ll mostly benefit giants. Some urge copying South Korea’s model: 40% R&D tax credits plus military-style R&D consortia. “We’re not asking for the moon,” says a SEMI rep, “just rules that don’t tie our hands.”
Bottom Line
Europe’s chip future hinges on three words: faster, simpler, funded. With global rivals spending like there’s no tomorrow, 2026 might be too late. As one CEO put it: “In semiconductors, you either lead or become someone else’s supply chain.”
