EU Commission proposes Chips Act 2.0 to bolster chip independence, target €20B in funding

The European Commission adopted a proposal for Chips Act 2.0 on June 3, 2026, introducing new measures to boost the semiconductor industry and reduce EU strategic dependencies on third countries. The 2.0 framework builds on the original Chips Act, which mobilized over €52 billion in public and private investment and created an estimated 46,000 direct and indirect jobs. The new regulation aims to establish demand accelerators, accelerate approval processes, introduce "European regions of excellence for semiconductors," and strengthen cooperation with international partners to accelerate development of AI chips and cutting-edge semiconductor technologies.

Silicon Saxony, Europe's largest semiconductor cluster with over 700 members, welcomed the Chips Act 2.0 but called for substantial fiscal backing beyond the proposal. The cluster lobbied for an independent semiconductor budget line of at least €20 billion in the European Competitiveness Fund through the multiannual financial framework (MFF) 2028-2034. Saxony hosts major investments from TSMC (~€20B), Infineon (~€5B Smart Power Fab opening July 2026), and GlobalFoundries (~€1.1B SPRINT project to reach 1M wafer starts per year by 2028).

For practitioners and infrastructure teams across the EU, Chips Act 2.0 marks a policy transition from supply-side subsidies to demand-side acceleration. The inclusion of "Buy European" procurement clauses and synergies with the Cloud and AI Development Act position semiconductor availability as infrastructure for broader tech sovereignty. Approval timelines and funding certainty through 2034 will determine whether Saxony and other EU fabs can compete with TSMC Taiwan and Samsung on lead times and cost, making the next-quarter budget negotiations critical.