Europe to incentivise governments to buy EU-made chips by startups, document shows - KFGO

The European Commission is advancing a new initiative, the 'Chips Act 2.0,' aimed at reducing Europe's reliance on U.S. and Asian chip suppliers by encouraging governments to procure chips made by EU ... Read original →

The EU’s pivot to demand-side incentives reveals deep structural gaps in its advanced semiconductor ecosystem. Technologically, this will spur localization of EDA tools, IP cores, and packaging—but mature-node (≥28nm) 'self-reliance' won’t meet AI/HPC demands. Compliance-wise, mandating public procurement from EU startups inflates costs and risks WTO subsidy disputes, especially amid U.S. CHIPS Act trade barriers. Strategically, TSMC (Taiwan, China) and Samsung may slow European fab expansions, prioritizing U.S. and Japan; Intel will likely lobby for extra subsidies. Over the next 12–24 months, expect a 'policy-driven bubble': startups surviving on government orders but lacking market viability. Without commercial traction in automotive/industrial chips by 2027, the €120B investment could mirror Europe’s solar industry collapse—overcapacity, lagging tech, and strategic drift.