European Ministers Push New Strategy to End Reliance on Foreign Computer Chips

2026-09-26 semicon

Brussels, Saturday 26 September 2026
After major supplier ASML recorded zero European system sales last quarter, EU ministers met this week to advance Chips Act 2.0, targeting vital economic sovereignty.

The Brussels Policy Debate and the Strategic Pivot

On Thursday, 24 September 2026, European Union industry ministers convened in Brussels for a Competitiveness Council meeting to debate the proposed European Chips Act 2.0 [1][2]. Presented by the European Commission on 3 June 2026, this updated framework marks a fundamental shift in the bloc’s technological-sovereignty strategy [1][3]. Rather than focusing solely on supply-side production subsidies, the new strategy prioritises creating local demand, securing supply chains, and strengthening economic security [1]. This legislative push comes as the EU attempts to address significant vulnerabilities in its semiconductor supply chain, where European manufacturers remain heavily dependent on external suppliers [1].

The European Manufacturing Mismatch

The urgency of the Brussels discussions is highlighted by recent market data from the Dutch lithography giant ASML, which reported zero net system sales in Europe during the second quarter of 2026 [5]. As ASML supplies the critical extreme ultraviolet (EUV) lithography systems required to manufacture the world’s most advanced microchips, its lack of European sales exposes a widening mismatch between the region’s ambitions for AI infrastructure and its limited local manufacturing base [5]. While global competitors such as the United States, China, and India aggressively build new fabs, Europe’s lack of advanced fabrication projects threatens its goal of securing technological leadership [5]. In 2025, European semiconductor consumption reached €41.1 billion, representing 10.5 per cent of global shipments [1]. However, EU-based production accounted for only approximately 20 per cent of this internal consumption, translating to an estimated domestic production value of just 8.22 billion euros [1].

From Subsidies to Demand Acceleration

To bridge this gap, the proposed Chips Act 2.0 introduces novel policy instruments, including ‘Demand Accelerators,’ a ‘Demand Forum,’ and innovation procurement pathways [1]. These tools are designed to link semiconductor capacity directly with the requirements of data centres, cloud service providers, and planned AI Gigafactories [5]. To speed up capital deployment, the proposal includes a maximum 12-month permitting procedure for qualifying strategic investments [1]. Additionally, the Commission has proposed a voluntary Business-to-Business Semiconductor Supply Chain Platform to help companies map out and identify structural dependencies before critical shortages occur [1].

Strengthening the Value Chain: Photonics and Chip Design

During the policy debate, member states identified several priority investment areas essential for bolstering the European semiconductor ecosystem [2][3]. Delegations emphasised the need to focus resources on power semiconductors, quantum technologies, advanced packaging, mature technologies, advanced materials, and chip design [2][3]. A key focus was placed on integrated photonics, a sector where European hubs like Eindhoven and Leuven hold significant research capabilities [GPT]. Ministers stressed the critical need to accelerate the transition of these technologies from the research and innovation phase to full-scale industrialisation and market uptake [2][3]. To address upstream vulnerabilities, the European Commission is also integrating the semiconductor strategy with the Critical Raw Materials Act to reduce reliance on concentrated third-country suppliers [1].

Reconciling Antitrust Rules with Industrial Ambition

The drive for technological sovereignty has also sparked discussions on internal market rules. During the Competitiveness Council, ministers discussed draft Merger Control Guidelines first published on 30 April 2026 [2][4]. Member states expressed broad support for an ‘innovation shield’ designed to protect start-ups and scale-ups from killer acquisitions, provided these measures complement existing consumer and SME protections [2][4]. However, the debate over state aid remains contentious; the European Commission’s approval of €659 million in German state aid for four semiconductor projects in the summer of 2026 has revived debates regarding fiscal disparities among member states [1]. Despite these debates, major industrial regions have welcomed the strategic direction. On Friday, 25 September 2026, the German Bundesrat officially adopted a supportive position on the Chips Act 2.0, an initiative led by the Free State of Saxony—home to the ‘Silicon Saxony’ cluster, which produces one in three European chips [6].

The Path to 2027 and Beyond

As legislative negotiations continue, the Council presidency aims to reach an agreement with the European Parliament by the second quarter of 2027, with the primary implementation of the funding strategy targeted for the 2028–2034 budgetary period [1][6]. Highlighting the stakes of the negotiations, Peter Burke, Ireland’s Minister for Enterprise, Tourism and Employment, noted that while the EU has mobilised billions, investment alone is insufficient if Europe remains dependent on chips manufactured elsewhere [2][3]. Burke warned that in the global race for AI and advanced technologies, Europe cannot afford to be just a customer, but must become a frontrunner [2][3].

Sources & Ecosystem Partners

semiconductor strategy technological sovereignty