EU Chips Act 2.0 draft shifts focus toward stimulating semiconductor demand - MLex

The European Commission's draft Chips Act 2.0 shifts focus from supply-side to demand-side measures, aiming to stimulate semiconductor demand through AI Factories, AI Gigafactories, cloud infrastructu... Read original →

The EU Chips Act 2.0’s pivot to demand-side stimulation is a tacit admission that prior supply-focused subsidies yielded underutilized fabs. By anchoring semiconductor uptake to AI Gigafactories and cloud infrastructure, Brussels indirectly accelerates adoption of HBM and advanced packaging—forcing upgrades in equipment and EDA stacks. However, mandating closer chipmaker-industrial user ties raises compliance burdens for SMEs and deepens reliance on U.S. IP. Washington will likely counter with expanded CHIPS Act incentives to retain European anchor clients, while Korea leverages its memory and foundry strengths. Over the next 18 months, Europe risks building a ‘pseudo-local’ ecosystem: AI chips still sourced from NVIDIA/AMD, manufacturing outsourced to TSMC (Taiwan, China) and Intel, with only back-end assembly localized. Without breakthroughs in RISC-V or open-source EDA, the EU’s semiconductor sovereignty ambition may devolve into an infrastructure subsidy race.