EU proposes Chips Act 2.0 to strengthen semiconductor capacity, reduce strategic dependencies
The European Commission on June 3, 2026 proposed the Chips Act 2.0, a new legislative framework designed to strengthen Europe's semiconductor industry, reduce reliance on non-EU suppliers, and build capacity in cutting-edge chip manufacturing. The proposal 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 Chips Act 2.0 introduces new measures including support for AI-chip development, demand accelerators to align semiconductor products with industry needs, and strategic procurement provisions emphasizing European added value.
The 2.0 framework targets both advanced manufacturing and mainstream chip production, addressing Europe's current dependency on third countries in areas like advanced chip fabrication and semiconductor design. Key initiatives include establishing 'Grand Challenges' to support development of AI chips critical to the EU, strengthening international partnerships in semiconductors, and creating synergies with the Cloud and AI Development Act to drive demand from data centers, cloud providers, and AI gigafactories. The proposed legislation also introduces the concept of 'European regions of excellence for semiconductors,' designed to promote clustering and institutional excellence.
Implementation of Chips Act 2.0 hinges on member state funding decisions in the upcoming 2028–2034 multiannual financial framework (MFF). European industry bodies including the Silicon Saxony cluster are calling for a dedicated semiconductor budget line of at least €20 billion in the European Competitiveness Fund to ensure the legislation's industrial substance. Current investments in Saxony by TSMC, Infineon, and GlobalFoundries total over €16 billion, demonstrating the scale of capital needed to compete with TSMC Taiwan and Samsung.
Sources
- Primary source
- silicon-saxony.de
“The Chips Act 2.0 aims to strengthen the European semiconductor industry, reduce strategic dependencies, boost demand for chips”
- silicon-saxony.de
“Silicon Saxony supports the European Semiconductor Industry Association's call for an independent semiconductor budget line of at least 20 billion euros”
- digital-strategy.ec.europa.eu
“The Chips Act 2.0 builds on the progress made by the original Chips Act and will both reinforce current European strengths (including mainstream chips) and build capacity in cutting-edge semiconductor technologies”