Europe will miss semiconductor targets, says report
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Europe will miss its target of a 20% share of the global market for semiconductors by 2030 says a report by the European Court of Auditors.
The investments from the 2022 EU Chips Act has brought momentum to the European chip sector, but are unlikely to significantly enhance the EU’s position say the auditors who are calling for a ‘reality check’.
The EU urgently needs a reality check in its strategy for the microchips sector”, said Annemie Turtelboom, the ECA Member in charge of the audit. “This is a fast-moving field, with intense geopolitical competition, and we are currently far off the pace needed to meet our ambitions. The 20 % target was essentially aspirational – meeting it would require us to approximately quadruple our production capacity by 2030, but we are nowhere close to that with our current rate of progress. Europe needs to compete – and the European Commission should reassess its long-term strategy to match the reality on the ground”.
The Commission is responsible for only €4.5bn of the €86 billion in estimated funding for the Chips Act up to 2030. The remainder is expected to come from member states and industry.
For comparison, the top global manufacturers budgeted €405 billion in investment over just three years, which dwarves the financial firepower of the Chips Act. This is expected to increase the region’s share to just 11.7 % by 2030, up from 8% in 2024.
This may not strengthen calls for a second version of the EU CHIPS Act to speed up funding.
- Industry groups call for EU CHIPS Act 2.0
- EISA calls for more funds, support for European chips
- EU Chips Act ignores dependence on China
Dependency on imports of raw materials, high energy costs, environmental concerns, geopolitical tensions and export controls, and a shortage of skilled workers will also hold back the region, says the report.
It urges urgently carry out a reality check on the Chips Act to assess whether the ambitions and targets that it contributes to remain realistic in view of the resources available to achieve them, global competition, as well as other crucial factors, such as energy cost and dependence on raw materials. This would need appropriate short-term corrective action to help achieve the strategic objectives.
A new semiconductor strategy with clearer targets needs to include a coordinated approach at EU level, including interactions with competing economies on a global scale by 2026, as well as more complete data.
The report is here: ECA Semiconductor report
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