Chips Act 2.0

Why do we need the Chips Act 2.0?

Semiconductors are part of the EU’s broader effort to strengthen technological sovereignty. They are key enablers of Europe’s ambition to become an AI continent, and power the next generation of technologies that will define European competitiveness: AI applications, cloud infrastructure, drones, connected vehicles, industrial robotics... 

The Chips Act 2.0 will complement other new initiatives, including the Cloud and AI Development Act and the Open Source Strategy, in contributing to a more competitive, secure and resilient European digital economy.

The original Chips Act marked the EU’s first coordinated response to critical vulnerabilities in the global semiconductor supply chain. It helped mobilise more than €52 billion in public and private investment, created an estimated 46,000 direct and indirect jobs, and strengthened Europe’s research and innovation capacity in semiconductors.

Despite this progress, the EU remains dependent on third countries in key areas such as advanced chip manufacturing or semiconductor design.

The global semiconductor market is also rapidly evolving. By 2030, it is expected to reach €1.37 trillion, with AI-related components driving around 70% of that growth. The Chips Act 2.0 is designed to ensure that Europe captures a larger share of this opportunity, while strengthening areas where we already excel.

Main objectives of the Chips Act 2.0

1. Improving conditions for investment and competitiveness

• Strengthening research, innovation, and skills development across the semiconductor ecosystem;
• Accelerating permitting procedures with approvals within a maximum of 12 months;
• Introducing "Grand Challenges" to support the industrial development of chips of key importance to the EU, such as AI chips;
• Strengthening cooperation with international partners through Strategic Partnerships on Semiconductors.

2. Stimulating demand and industrial uptake

• Strengthening links between chips manufacturers and demand from user industries;
• Establishing Demand Accelerators to ensure that new semiconductor products are aligned with industry needs and reach the market more quickly;
• Ensuring that public procurements in critical areas focus on bringing EU added value with economic growth, jobs, and skills located in the Union;
• Increasing the use of innovation procurement to boost demand, notably for European-based startups & scaleups and their technologies;
• Creating synergies with the Cloud and AI Development Act to benefit from demand for European chips stemming from the growth of sectors such as data centers, cloud service providers, and AI Gigafactories.

3. Reinforcing supply-side measures

• Enabling State aid funding for "First-of-a-Kind" projects not yet present in the Union for the whole semiconductor value chain, from raw materials to packaging;
• Designating Strategic projects to unlock EU funding and co-invest with Member States and industry in projects of strategic importance and added value for the EU;
• Creating the framework conditions at regional level to attract semiconductor investments, and promote the regions who do so with a new Semiconductor Regions of Excellence label.

4. Increasing resilience and reducing dependencies

• Establishing a Business-to-Business Semiconductor Supply Chain Platform to support our industry in proactively improving their resilience to supply disruptions;
• Further supporting sectors repeatedly exposed to risks with guidance on conducting risk assessments and risk mitigation measures;
• Reducing overreliance on external suppliers for critical semiconductor technologies.