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European Chips Act, A game-changer!

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Semiconductor industry


Chips Act will facilitate finance to start ups and scale ups

European Union has presented a comprehensive policy to ensure that the EU continues to stay as the technological powerhouse of the world. This new act will strive to protect & strengthen the EU supply chain by bringing considerable investment. The aim is to help the startups to continue to bring their innovations to market. Additionally, it will help scale-ups and other SMEs to expand their market.

EU wants to double their market share from a current 10% to 20%

The world-leading research and technological organizations will be able to resolve current issues and protect their supply chain in case of disruptive calamities. On the horizon is also the need to help thrive the Semiconductor industry by mobilising more than €43 Billion of public as well as private investments.

Commission President Ursula von der Leyen said: “The European Chips Act will be a game-changer for the global competitiveness of Europe’s single market. In the short term, it will increase our resilience to future crises, by enabling us to anticipate and avoid supply chain disruptions. And in the mid-term, it will help make Europe an industrial leader in this strategic branch. With the European Chips Act, we are putting out the investments and the strategy. But the key to our success lies in Europe’s innovators, our world-class researchers, in the people who have made our continent prosper through the decades.”

Key Highlights of the European Chips Act

  • €11 Billion to be available for research, development, innovation, advanced semiconductor tools, testing, new life technologies & training.
  • A Chips fund will help start ups to mature their technology and attract innovations.
  • All SME’s and Scale ups to get dedicated support under InvestEU to help them expand their markets.
  • A coordination mechanism to value semiconductor supply chains by gathering key intelligence from the industry. To help find out any weaknesses and bottlenecks.
  • Creation of a new emergency toolbox to react swiftly and decisively by using National and EU instruments.


The EU wants to avoid “excessive dependencies” at the same time has duly noted the need for partnership with the “like-minded countries”. There is a global trend to make sure that future disruptions in the supply chain do not affect economies as it has during the CoVid19 problem. Countries like Japan, South Korea, China and India is also boosting investments in Semiconductor technology and manufacturing. As the EU wants to become self-reliant it would still have to depend on US & Asia. Asian companies now dominate the manufacturing scene with Taiwan’s TSMC which has about a 50% market share followed by South Korea’s Samsung and Taiwan’s UMC. Though Europe has some key companies in the sector for example ASML the Dutch firm that designs machines that are used by TSMC. Other examples are STMicroelectronics and NXP which supplies Apple. The European Chips Act is here to ramp up the existing base and bring in investments plus influence top manufacturers to open their bases in the EU.

Also read: New European Crowdfunding Regulation launched

EU Press release