As 2025 draws to a close, Europe’s semiconductor strategy is entering a pivotal new phase. After the initial European Chips Act — enacted in 2023 to strengthen research, manufacturing, supply chain resilience, and global competitiveness in semiconductors — calls are growing for a Chips Act 2.0 that would evolve this policy from emergency response into a long‑term industrial strategy aligned with global market realities and geopolitical pressures.
The original European Chips Act (Regulation (EU) 2023/1781) established a framework to support semiconductor R&D, incentivize public and private investment, and boost Europe’s manufacturing footprint. Its objectives included reinforcing research leadership, building capacity across design and production, addressing skills shortages, and enhancing supply‑chain visibility. Despite mobilizing billions in investment and designating pilot lines and capacity building programs, Europe still accounts for less than 10 percent of global semiconductor production — far below its stated goal of doubling that share by 2030.
As EU member states and industry groups convene in late 2025, pressure is mounting to revise this framework into a more robust Chips Act 2.0. Industry coalitions such as the Semiconductor Coalition — now backed by all 27 Member States — have presented declarations outlining multiple strategic priorities for the revision, including deeper integration between industry and research, streamlined project approvals, and stronger alignment of public and private funding.
Stakeholders, including SEMI Europe and national electronics associations, have put forth recommendations for Chips Act 2.0 that extend beyond the original emphasis on fab construction. These calls emphasize a whole‑value‑chain approach that includes design, materials, testing, advanced packaging, and talent development, not just front‑end manufacturing capacity. They argue that investment must be coherent, data‑driven, and tied to clear industrial outcomes if Europe is to compete with the United States and Asia in semiconductors.
Critics of the original Act point to uneven progress and bureaucratic hurdles that have slowed project deployment and deterred investors. At SEMICON Europa 2025, industry observers reported that regulatory paperwork and permitting processes in the EU remain comparatively burdensome — a factor that could hinder timely deployment of new facilities and pilot programs. This concern underscores the need for policy refinement if Chips Act 2.0 is to succeed where the original framework faced limitations.
Experts also emphasize the importance of coordination mechanisms such as the European Semiconductor Board and call for stronger industry engagement in policymaking. Papers submitted during public consultations — including comments from the Semiconductor Industry Association (SIA) — recommend that Europe develop better data‑gathering tools and more responsive governance structures to connect policy objectives with market signals.
The revision effort is taking place against a backdrop of continued investment. By late 2025, the Chips Act had already catalyzed more than €69 billion in public and private investments, helping designate First‑of‑A‑Kind (FOAK) facilities and foster pilot lines across the EU. This shows the potential of a coordinated policy when combined with targeted funding — but also how much more remains to be done to translate investment into industrial scale and competitive advantage.
For microelectronics suppliers, component buyers, and system integrators, the evolution of the EU Chips Act into a more strategic Chips Act 2.0 matters on several fronts. It will influence where funding flows, which technologies get prioritized, and where capacity will be developed — from legacy nodes to advanced packaging and heterogeneous integration. Companies with a presence or aspirations in the European market should track how Chips Act 2.0 proposals evolve, engage with local industry coalitions, and align their roadmaps with emerging EU priorities to leverage incentives and mitigate risks tied to regulatory and geopolitical shifts.
In a global semiconductor landscape marked by supply‑chain realignment and competition for strategic autonomy, Europe’s effort to update its Chips Act could define its competitive posture for the next decade — provided it successfully marries policy ambition with implementation pragmatism.