EU Chipmakers Urge for ‘Chips Act 2.0’ to Enhance Semiconductor Industry Support

In the face of increasing global competition and internal delays, Europe’s leading chip manufacturers are calling for the introduction of a new initiative known as ‘Chips Act 2.0’. This push highlights both the industry’s current challenges and the urgent need for strategic governmental support. The European Semiconductor Industry Association (ESIA), which represents major companies like Infineon, STMicroelectronics, and ASML, has expressed deep concerns about the future of the semiconductor sector within the EU, citing critical delays in aid approvals and restrictive export policies.

The initial EU Chips Act, launched in April 2023, aimed to elevate Europe’s share of the global semiconductor market to 20% by 2030. Although the Act has led to significant projects such as a €10 billion TSMC factory in Dresden and a €30 billion Intel investment in Magdeburg, progress has been slower than expected. Intel, in particular, has faced challenges that threaten its ambitious plans, underscoring the need for accelerated support measures.

One core request from ESIA is the appointment of a dedicated ‘Chips Envoy’ to effectively oversee and implement the bloc’s semiconductor strategy. This role would be instrumental in streamlining aid processes and ensuring that bureaucratic hurdles do not impede the industry’s growth. The idea is not just to increase financial support but also to foster a more proactive, incentive-based approach to economic security.

While security considerations are paramount, the current approach often leans towards defensive trade policies, which could stifle innovation. For example, the recent restrictions affecting ASML’s high-tech exports to China illustrate the complexity and challenges the industry faces amidst geopolitical tensions. ESIA advocates for a shift towards incentives that could encourage investment and expansion rather than merely focusing on restrictions that could limit potential growth avenues.

Another vital aspect that needs addressing is the existing export controls, which have provoked discontent within the industry and raised existential concerns about the future of semiconductor manufacturing in Europe. By reducing bureaucratic burdens and fostering a supportive regulatory environment, companies could focus more on technological advancements and competitive positioning in the global market.

Furthermore, with the competition heating up from countries like the United States and China, Europe’s semiconductor industry must pivot quickly. The ongoing technological and economic race fueled by countries investing heavily in semiconductor innovation is forcing the EU to reconsider its strategies for growth. As noted by industry leaders, adopting an approach centered on robust incentive programs could create a conducive environment for innovation and yield considerable benefits for European chipmakers.

The urgency for ‘Chips Act 2.0’ reflects a critical juncture for the semiconductor industry in Europe. The success of future projects is contingent on the timely implementation of policies that support both current operations and the long-term sustainability of chip manufacturing. If executed effectively, this legislative push could not only stabilize the industry but also enhance Europe’s competitiveness on the global stage.

In conclusion, Europe’s chipmakers are united in urging for faster and more efficient governmental support in the form of a revamped Chips Act. The need for a refined approach to economic security—one that fosters innovation through incentives rather than impediments—is crucial now more than ever. If the EU can adapt to these demands, the region stands a good chance of reclaiming its position as a leader in the global semiconductor landscape.