Could Europe’s semiconductor ambitions stall without faster action? Industry body says Chips Act 2 must prioritise competitiveness, investment and demand to succeed.
Europe’s semiconductor industry has welcomed the European Commission’s newly unveiled Tech Sovereignty Package and Chips Act 2 but warned that the bloc must now focus on implementation, competitiveness and market development if it is to strengthen its position in the global semiconductor sector.
The European Semiconductor Industry Association (ESIA) said the package reflects the growing strategic importance of semiconductors amid increasing geopolitical tensions and rising demand from sectors such as artificial intelligence, energy, defence, mobility and industrial automation. However, the association argued that policy ambitions alone will not be sufficient to secure Europe’s long-term leadership.
“Europe cannot regulate its way into semiconductor leadership,” said Erik Rein. “The global semiconductor race will be won by those who innovate fastest, industrialise fastest, and create the strongest market demand.”
The industry group welcomed the Commission’s stronger emphasis on demand creation, supply chain resilience, and support for the wider semiconductor ecosystem.
It also backed proposals to expand the definition of ‘first-of-a-kind’ projects beyond fabrication plants to include other parts of the semiconductor value chain, such as design, materials, equipment, product engineering and industrial collaboration.
Meanwhile, Europe seeks to build capabilities in areas where it already holds competitive positions, including power semiconductors, sensors, automotive electronics, connectivity technologies, robotics and Edge AI.
ESIA said these technologies will play an important role in deploying AI across factories, vehicles, healthcare systems, and energy infrastructure.
The association also highlighted concerns over lengthy permitting processes, regulatory complexity, energy costs and fragmented implementation across member states, arguing that these factors continue to weaken Europe’s attractiveness for semiconductor investment.
Rein said semiconductor innovation cycles move rapidly and require policy decisions to keep pace with industry needs. ESIA is also calling for a permanent structured dialogue between policymakers and industry as discussions on the legislation continue.
