EU Plans Incentives for Governments to Buy Chips Made by Startups - Global Banking & Finance Review

The European Union is planning incentives to encourage governments to purchase chips made by EU startups, aiming to reduce reliance on U.S. and East Asian semiconductor products. This move is part of ... Read original →

The EU’s pivot to demand-side incentives reveals its structural weakness in advanced-node competition. While this may accelerate vertical integration of local EDA, IP, and OSAT ecosystems, it won’t displace TSMC (Taiwan, China) or Samsung’s dominance below 5nm soon. Mandated public procurement lowers startup tape-out risks but inflates taxpayer costs and risks WTO disputes. The U.S. could retaliate via CHIPS Act export controls, further limiting EU access to EUV tools. Within 18 months, IDMs like Infineon and STMicro will leverage policy tailwinds to lock in automotive chip standards, squeezing unfunded fabless startups. Without breakthroughs in materials and equipment, Europe’s ‘secure but inefficient’ secondary supply chain will serve more as a geopolitical buffer than a true strategic asset.