‘Much of the value creation in the semiconductor industry is occurring outside the EU’ says EU member states, and they want a fresh plan to claw some chips back
By Jacob Ridley
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‘Much of the value creation in the semiconductor industry is occurring outside the EU’ says EU member states, and they want a fresh plan to claw some chips back
Jacob Ridley
29 September 2025
It’ll take some serious cash or pressure to bring semiconductor production back to Europe, as the US is currently finding out.
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A new declaration from all 27 EU member states lays out an “urgent need” for a new and improved EU Chips Act. Essentially, Europe feels like it’s fallen behind in chip production and design, and it would like to see a concerted effort from the European Commission to regain ground.
“To secure and strengthen our global position,” the declaration reads (via The Register), “the EU must prioritize the semiconductor sector as a strategic industry, on par with aerospace and defence, and treat it as a key target for investment, R&D and innovation, and—if necessary—use the available instruments to protect it and act collectively.
“However, while global competitors are significantly ramping up public investment, much of the value creation in the semiconductor industry is occurring outside the EU,” it continues. “This underscores the need for a strengthened, second-phase EU Chips Act that is both ambitious and forward-looking.”
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You have to agree with the signatories here, which represent each of the countries within the EU today, that Europe has slipped up with chip production. An OECD report (PDF) on the semiconductor value chain shows how the largest exporters of chips tend to be in Asia, such as China, Korea, and Taiwan, with companies in the US making the most money from these chips, as per this Semiconductor Industry Association report.
Europe does have a place at the table with big firms such as Dutch company ASML, which builds most of the world’s cutting-edge semiconductor manufacturing machines. There are also companies such as Infinion, Europe’s largest chip manufacturer, and Arm, thought the latter was previously sold and since listed on a stock exchange outside of Europe. Though this 2020 report from the Semiconductor Industry Association suggests the EU only makes up for 9% of global manufacturing capacity—lower than some individual countries such as Taiwan (22%), South Korea (21%) and Japan (15%). It also suggests this share will decrease by 2030 to 8%.
Dutch company ASML leads in EUV lithographic machinery. (Image credit: ASML)
As the declaration rightly points out, when you’re depending on semiconductors for “enabling necessary societal transitions”, you sort of want to be in a good place to produce the ones you require, especially as global trade and relationships can be so easily fractured.
Here’s what the report suggests should be the objectives of a revised EU Chips Act:
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Prosperity: enabling a competitive European semiconductor ecosystem that enhances Europe’s economic and broad welfare and value creation across end-markets.
Indispensability: maintain and develop Europe’s technological and innovation leadership to secure critical control points in the global semiconductor value chain.
Resilience: secure a stable and reliable supply of trustworthy semiconductors for Europe’s most critical sectors, particularly in times of global disruption or geopolitical uncertainty.
Yep, that all checks out. What self-respecting country or country bloc wouldn’t want these things? That’s the issue here, it’s not what you say, it’s how you do it. And competing in the highly-competitive world of semiconductors, especially when you’re already behind the times, is going to be excruciatingly tough going.
This is the revised Chips Act, so what happened to the original one?
That’s still very much in play, operating to increase the EU share in the “global market value chain by revenue” to 20% by 2030. The big issue is how realistic the act is. Right now, the EU is expected to be around 11.4% by 2030, as laid out in this report on the EU’s digital transition. This being so unrealistic is one of the main causes for concern at the original Chips Act, as noted in a special report by the European Court of Auditors, who suggest the target may have been “overly ambitious”.
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Intel’s now cancelled megafab facility, which was set to be built in Magdeburg, Germany. (Image credit: Intel Corporation)
“We recommend that the Commission carries out an urgent reality check and swiftly begins preparing the next strategy,” the special report published in April says.
The EU has opened a public consultation on the Chips Act, too, asking for evidence to review the effectiveness of the act.
Well, these many reports won’t do very much on their own. The original, surprisingly lightweight declaration suggests a few key topics for a future revision to the Chips Act. Here’s the quick version:
Collaboration between industries, supporting tech champions, and fast-tracked legislation.
Public and private investment and cross-industry collaboration, including quantum and AI fields.
Supporting skilled workers.
Supporting the green transition and clean energy.
Foster global collaboration.
There are some fine details in there on specific programs for skilled workers or funding programmes, though most represent points that I think anyone with a half-decent idea of semiconductors would also end up with if tasked with a plan of action for Europe. That’s not to say it’s ineffective, as it’s clearly a signal of intent with powerful backers (every EU member state, don’t forget), but the real question remains: how much money is the EU prepared to spend on this?
The US rolled out its own CHIPS and Science Act back in 2022 under the Biden administration, which invested roughly a couple hundred billion dollars into US chipmaking and research. That has ended up being tweaked by the current president, Donald Trump, as he used funds previously awarded to Intel under the act to buy shares in the business instead. This deal struck with Intel’s new CEO, Lip-Bu Tan, who also canned the company’s planned European megafab, which was a big part of Europe’s optimistic push into more domestic semiconductor manufacturing. Intel still operates a big fab facility in Ireland.
The Trump administration has also pushed Nvidia and AMD into deals relating to their China business, and pushed chip designers (so-called fabless companies) to buy more of their chips from US manufacturing than foreign fabs. You can see the difference between carrot and stick here, right? China also recently rolled out similar measures to block local firms from buying up foreign-made tech, including Nvidia’s purpose-made and only very recently green-lit AI chips.
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Jacob Ridley
Managing Editor, Hardware
Jacob earned his first byline writing for his own tech blog, before graduating into breaking things professionally at PCGamesN. Now he’s managing editor of the hardware team at PC Gamer, and you’ll usually find him testing the latest components or building a gaming PC.
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US government announces that its investigation into chip imports will have results within two weeks, potentially paving the way for a raft of new tariffs on all things silicon
Trump administration is reportedly planning to tariff US tech firms that don’t source equal numbers of imported and American chips
The US government wants a 10% stake in Intel in return for that CHIPS act cash
Save Intel’s fabs before ‘the rust of time makes them worthless’: Four former Intel board members want a joint venture between Nvidia, Qualcomm, Google, Amazon, Apple, Broadcom and others to create an ‘American Foundry’
The US government could get even more Intel stock if the company ends up losing control of its chip manufacturing business
The European Commission wants Europe to become the world leader in quantum computing within the next five years
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