EU Backs €43 Billion Plan to Rebuild Its Chip Industry

The European Union reached a political agreement in April 2023 on the European Chips Act, a €43 billion legislative package designed to double Europe's global semiconductor manufacturing market share to 20% by 2030 and reduce the continent's dependence on Asian chip supply chains exposed as dangerously fragile during the COVID-19 pandemic. The package mobilizes both public investment and private capital toward building cutting-edge fabrication facilities, establishing competence centers, and securing supply chain resilience across the bloc.

The legislation entered into force in September 2023, running parallel to the United States' own $52 billion CHIPS and Science Act as both powers pursued industrial policy designed to reduce strategic vulnerability concentrated in Taiwan and South Korea. European officials framed the initiative as a geopolitical imperative as much as an economic one, arguing that control over semiconductor manufacturing is increasingly inseparable from national security and technological sovereignty.

The 20 percent target did not survive the auditors. The European Court of Auditors called the strategy "deeply disconnected from reality" in April 2025, per the Guardian, forecasting an 11.7 percent share in 2030 and noting Brussels directly managed only about €4.5 billion of the €86 billion it advertised. Intel then canceled its €30 billion Magdeburg fab in July 2025, taking the flagship with it; TSMC's ESMC plant in Dresden, due at full capacity in 2029, is the largest project still standing. The Commission's answer is Chips Act 2.0, proposed on June 3, 2026 with no headline funding figure at all, per eeNews Europe. Watch whether the 2028 to 2034 budget talks fill that blank before Parliament votes the file.