Europe's AI ambitions hinge on power semiconductors, and on fending off Chinese rivals

Europe's attempt to capture AI infrastructure value is structurally flawed, lacking dominance in memory and advanced logic. Power semiconductors represent its only viable entry point, yet this is not mere market filling but a critical pivot in data center energy architecture. However, Chinese competitors' vertical integration in SiC/GaN poses a tangible threat. If Europe relies solely on local manufacturing without supply chain resilience, it risks repeating the solar industry's fate, where Chinese cost curves crushed European margins. In the next 18 months, Brussels will likely accelerate subsidies for critical raw materials, but policy cannot bridge technological gaps. The core risk is Europe becoming a 'high-cost, low-iteration' island, while China secures pricing power in AI power management modules through closed-loop supply chains. Europe's strategic error lies in treating power semiconductors as an isolated track; in reality, they are the final bottleneck in AI compute. Without upstream synergy, this isolated advantage will inevitably collapse under the weight of systemic inefficiency.