Europe’s semiconductor sector calls for immediate ‘Chips Act 2.0’

ESIA, the association representing Europe’s semiconductor industry, has called for an “immediate Chips Act 2.0” — if the bloc is to maintain momentum in the global race for technological leadership.

The group comprises major chipmakers such as NXP and Infineon as well as research organisations including imec and Fraunhofer.

The EU’s Chips Act entered into force in September 2023. It aims to mobilise €43bn in public and private investments that will the help the bloc to produce 20% of the world’s semiconductors by 2030.

In a statement on Monday, ESIA acknowledged the act as “a fundamental building block.” However, it argues that the EU still needs to reconsider its scope, streamline processes, and address gaps.

One such step is fast-tracking state aid schemes — one of the regulation’s most crucial mechanisms to attract major international companies and increase the number of domestic chip factories.

The EU has still to approve state aid for Intel’s planned €30bn mega fab in Germany. Last month, it finally approved €5bn in support of TSMC’s upcoming chip plant in Dresden — a year later after the Taiwanese chip giant announced its commitment to invest in the bloc.

Open trade and a “holistic” policy approach

Another step, according to ESIA, is the support of open trade.

The group advocates for a “more positive approach to economic security” instead of a defensive strategy that “relies on restrictive and protective measures.”

ESIA’s suggestion echoes the multiple export restrictions of ASML’s chipmaking machines to China amid tense relations with the US.

And as (under US pressure) the Dutch government is currently assessing further curbs, China is reportedly considering cutting ties with ASML altogether, depriving the company of one of its biggest markets.

Finally, ESIA proposes continuous competitiveness checks and a coordinated, “holistic” industrial strategy that involves the industry players.

This includes a special body within the European Commission.

“A dedicated ‘Chips Envoy’ responsible for the overall industrial policy approach to semiconductors, is a necessity,” the group said.