European chipmakers want local politicians to look beyond the region's Chips Act and do more to support research and development, materials, and design, not just manufacturing.

A group of European semiconductor businesses held a roundtable event in the European Parliament this week, along with industry bodies SEMI Europe and the European Semiconductor Industry Association (ESIA).

On the agenda was the development of a broader strategy to succeed the €43 billion ($47 billion) European Chips Act finalized in 2023, dubbed by some as "Chips Act 2.0."

"Indeed that is what the semiconductor industry in Europe is calling for, to ensure that we can complement the existing Chips Act with measures that support the industry across the entire supply chain," Stefano Ramundo Orlando, SEMI Europe's Manager for Advocacy and Public Policy, told The Register.

Following the roundtable, they sent a joint declaration to Henna Virkkunen, the European Commission's Executive Vice President for Tech Sovereignty, Security and Democracy, urging a follow-up to the Chips Act with additional R&D funds and measures to attract new investment and increase European competitiveness.

Something similar was proposed last year, but these efforts gained extra impetus due to the second Trump administration and its "volatile trade policies", which have led to a great deal of uncertainty in global markets, with chips no exception.

Earlier this month, nine EU Member States started the Semiconductor Coalition, pledging to reinforce cooperation aimed at strengthening Europe's competitiveness and strategic autonomy in the semiconductor sector.

Considering the concerns and challenges faced today, the European semiconductor ecosystem requires a holistic approach that supports semiconductor design and manufacturing, R&D, materials, and equipment capabilities, SEMI stated.

"Our sector sees three priorities," ESIA Vice-President Frédérique Le Grevès said. "We need a clear European semiconductor strategy that is backed by a revised European Chips Act with more quickly advancing administrative procedures. Secondly, we must identify the right approach to trade and foreign policy leading to more resilience, and thirdly, continue our focus on fostering innovation."

According to Reuters, the European Chips Act delivered a surge of investment in manufacturing, but failed to address the rest of the supply chain. While much of the funding was provided by member states, projects were delayed by the need for central EC approval.

Tech firms in attendance at the roundtable included Infineon, Bosch, NXP, STMicroelectronics, and chipmaking tool biz ASML.

Richard Gordon, Vice President & Practice Lead, Semiconductors, The Futurum Group, was skeptical, and said the whole push appeared to boil down to: "1. Cut red tape (good luck with that in the EU bureaucracy). 2. Figure out how to deal with Trump's America first policies (Again, the signs are not good so far that the EU has the first clue how to go about that). 3. Dole out some more EU taxpayers' money (presumably to the usual suspects in France, Germany and Italy)."

Gordon added: "I'm not convinced the EU has the ability to actually achieve anything of substance."

Ironically, the European semiconductor industry's demands resemble the policies already adopted by the British government, which decided in 2023 to focus on chip design, R&D, and compound semiconductors – areas perceived as those where the country has an edge – instead of spraying cash on subsidizing massive new fabrication plants.

This was partly because the UK simply can't draw on the same level of funding as the US and EU, and was praised by some experts for taking the right approach. However, the government was criticized by trade association TechUK last month for not moving fast enough to deliver on its semiconductor strategy goals.

Even more ironically, Britain's Technology Secretary, Peter Kyle, is currently "banging the drum" for closer UK partnership with the US on technologies such as AI.

This seems like a phenomenally ill-considered strategy right now, especially in light of recent moves in the EU to reduce the region's reliance on foreign-owned (i.e. American) digital services and infrastructure. But then it was revealed last week that Kyle asks ChatGPT for science advice.

Speaking at the Nvidia GTC conference in San Jose, Kyle is set to meet US tech firms in the AI industry such as OpenAI, Anthropic, Nvidia, and Vantage, and will encourage them to invest in the UK.

By: DocMemory
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