EU members urge Brussels to revise Chips Act plan

Calls to revise Chips Act

Several EU member states are calling on Brussels to revise its Chips Act strategy. They argue that the initial plan lacks realism and sufficient focus on Europe’s actual needs. The proposal was meant to secure Europe’s role in the global semiconductor race.

However, industry analysts and auditors argue that implementation progress has been slow relative to the ambition of the targets.

The calls are pushing for a new “Chips Act 2.0.” A coalition of countries is now urging stronger measures. This revision could reshape the future of EU technology policy.

EU forms Semicon Coalition group

A growing coalition of EU states, led by the Netherlands, has formed the ‘Semicon Coalition.’ Their main goal is to pressure Brussels for a more practical approach.

They warn that Europe risks losing competitiveness in the global semiconductor race unless member states act in a more coordinated manner.

The coalition wants updated goals and investment priorities. Their influence is growing within the EU policy space. By uniting, they aim to strengthen Europe’s chip strategy. This group is pushing for major reforms.

Concern over unrealizable market target

The original Chips Act set a target of 20% global market share by 2030. Many experts say this is unrealistic. Europe currently controls less than 10% of the semiconductor market. Reaching the target would require massive investment and scaling.

Critics believe the EU underestimated the challenge. Auditors even called the target “deeply disconnected from reality.” Revising the target is now a top priority.

Aim to secure critical technologies

At its core, the Chips Act was meant to safeguard Europe’s access to semiconductors. Chips power everything from smartphones to defense systems. Ensuring independence in this area is critical. Recent supply chain crises highlighted vulnerabilities.

The revised plan may refocus on securing “critical technologies.” Protecting sovereignty is seen as more important than just market share. Strategic independence is becoming the central goal.

Push for faster permitting process

One major barrier to new chip plants is slow permitting. Industry leaders say EU bureaucracy is slowing down construction. In contrast, the US and Asia move much faster.

Delays make Europe less competitive in attracting investment. Member states are asking for streamlined approval processes. They want faster, simpler permits for fabs and facilities. This would give Europe a stronger edge globally.

More investment in chip design

Much of Europe’s funding has gone to manufacturing capacity. But industry experts say design is equally important. Without strong design capability, Europe risks staying behind. Countries like the US excel in chip architecture.

The coalition is urging Brussels to boost R&D spending. Investments in design talent and startups are needed. Building design strength could balance Europe’s semiconductor ecosystem.

Include legacy chips in strategy

So far, the EU focus has been on cutting-edge chips. However, industries like automotive rely heavily on legacy semiconductors. The shortage during the pandemic hurt Europe’s car sector. Industry groups argue legacy chips must be part of Chips Act 2.0.

Ignoring them leaves a major gap in supply resilience. Adding them would support Europe’s strongest industries. Legacy chips are just as critical as advanced ones.

Skills shortage is hindering progress

Europe faces a serious skills gap in semiconductor talent. Engineers, technicians, and researchers are in short supply. Without skilled workers, new fabs may not succeed. Countries are asking for stronger education and training programs.

Universities could partner with industry to create talent pipelines. Incentives may also be needed to attract global experts. Solving the skills issue is key to Europe’s chip ambitions.

Need distinct chips budget

Critics say the Chips Act budget is too small and fragmented. Current funding is spread across many EU programs. This makes it hard to track impact and progress.

The coalition wants a clear, dedicated chips budget. A standalone fund would simplify investment decisions. It could also boost private sector confidence. Without a bigger and clearer budget, the plan may fail.

Strengthen supply chain resilience

The pandemic exposed Europe’s reliance on Asian imports. Chips shortages disrupted everything from cars to medical devices. Strengthening supply chain resilience is now a major priority.

The coalition argues for building more domestic capacity. Partnerships with trusted allies could also help. Diversifying supply is seen as essential for security. A stronger chain protects Europe in future crises.

React to global geopolitical tensions

The semiconductor race is deeply tied to geopolitics. The US and China are both investing heavily in chips. Tensions between them risk further disruption in supply.

Europe cannot afford to be caught unprepared. A revised Chips Act would address this reality. Member states want Brussels to act strategically. Global politics now heavily influence Europe’s chip strategy.

Industry wants assertive industrial policy

Chipmakers and industry groups have asked for bolder EU action. They say subsidies and funding remain too weak. Without stronger incentives, companies may invest elsewhere. Europe risks losing out to the US or Asia.

Industry leaders want an “assertive industrial policy.” This means faster decisions and larger subsidies. The EU must show it can compete at scale.

Criticism from European Court auditors

The European Court of Auditors recently reviewed the Chips Act. Their report called the plan unrealistic and poorly designed. They said goals were “deeply disconnected from reality.” The auditors questioned whether the EU can deliver results.

This criticism has fueled calls for revision. Policymakers now face pressure to address these flaws. Auditors demand accountability and clearer progress tracking.

Member states demand realistic goals

Several EU governments now push for revised targets. They argue the 20% share goal is too ambitious. Instead, they want more practical milestones.

Success should be measured by resilience and independence. Achievable goals would build credibility for the plan. Unrealistic ones risk making the EU look weak. Brussels must now balance ambition with realism.

Role of AI chips emphasized

Artificial intelligence is a growing demand driver for chips. AI accelerators and GPUs are in global shortage. Europe risks falling behind in this critical area. Member states urge Brussels to focus on AI hardware.

This includes both training chips and inference devices. Strong AI chip capacity would secure Europe’s tech future. AI is where the next battles will be fought.

Ready to see if Nvidia’s chips can now handle the heat? Explore how Nvidia resolves AI chip overheating issues.

What Chips Act 2.0 deliver?

The next version of the Chips Act could fix past flaws. It may shift focus toward realistic, strategic goals. More funding for design, legacy chips, and skills is expected.

Faster permitting and stronger supply chains are likely. If successful, it could secure Europe’s independence. But failure risks leaving Europe far behind global rivals. Chips Act 2.0 could significantly shape Europe’s technological trajectory in the coming decade.

Could US investors really be spared from the impact? Explore Trump to announce new chip tariffs sparing US investors.

Do you think Europe can realistically compete with the US and Asia in semiconductors, or will it remain dependent on imports? Share your thoughts.

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This slideshow was made with AI assistance and human editing.