The European continent’s dream of semiconductor sovereignty is flattening, and despite its leaders’ pledges to double its global production share to 20% by 2030, with its semiconductor process control Europe sector, it only managed to hit just 10% of worldwide chip output in 2022.
Europe is currently looking for a strong semiconductor supply chain that would not only drive economic competitiveness but also is critical for national security. However, European semiconductor manufacturers do have some serious challenges to overcome.
Europe’s dependence on foreign semiconductor technology is becoming an issue, as the EU’s percentage of the worldwide semiconductor market remains low compared to other global competitors like China and US.
Although the EU Chips Act funding has already revived the sector, Europe’s semiconductor manufacturers still depend heavily on external suppliers for advanced chips, putting it in jeopardy, especially with the tensions between dominant chip makers, US, China, and Taiwan.
China Europe Semiconductor Rivalry
In the semiconductor process control Europe sector, growing competition has become significant. China’s massive investments in chip technologies secured a 30% share of the global market – well ahead of Europe’s 13%.
As China’s aggressive chip expanding – now producing 21% of global semiconductors – has turned the semiconductor race into an existential challenge for Europe. With Beijing now pouring $150 billion into domestic fabs and mature node dominance, the EU’s 10% market share looks pretty precarious.
The EU semiconductor strategy is set for employing semiconductor investment to reduce dependence on Asian and US suppliers, to build local capacity in critical areas like semiconductor machining and production.
Unless challenges of strategic dependencies on Chinese semiconductor supplies are resolved, Europe risks undermining its economic security, for Chinese supply chains can also hinder the future of the EU semiconductor investment.
Call for Chips Act 2.0
The EU semiconductor strategy is taking a sequel form, with the Chips Act 2.0. The European Parliament and business leaders such as Christophe Fouquet, CEO at ASML, called for rapid action to guarantee Europe’s future in semiconductors.
Fouquet warned that, if not better safeguarded, Europe will likely see its leading companies fall into the hands of international competitors. With rising geopolitical tensions, the semiconductor process control Europe sector must be strengthened, and particularly in AI chips and high-performance computing (HPC).
Experts suggest an EU semiconductor alliance will help Europe drive innovation, protect mature companies, and attract new investment. To conclude, the new Chips Act must be accompanied by research and development (R&D) investment in cutting-edge technologies as an absolute priority and must promote public-private partnerships. The focus should be on semiconductor machining and making high-tech chips to enhance Europe’s competitive edge.
Will Europe Attain Semiconductor Sovereignty?
The global semiconductor market is becoming increasingly competitive on a daily basis, and the EU semiconductor strategy must also keep pace. Chips Act 2.0 is an important step toward attaining European technological sovereignty. One key priority must be EU semiconductor investment, creating a strong semiconductor alliance, and ensuring that Europe is not behind the curve in technology.
The EU’s future depends on strategic investments, technological advancement, and a resilient supply chain. With semiconductor process control Europe sector as a key pillar, the continent can secure its place in the global chip industry, boost innovation, and protect its economic and geopolitical future.
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