EU prepares launch of Chips 2.0 initiative
Semiconductors are the backbone of modern technology, powering everything from smartphones and data centres to electric vehicles and advanced medical equipment. Recognising their strategic importance, the European Union adopted the European Chips Act, which officially entered into force on 21 September 2023. The Act set ambitious goals: to strengthen the EU’s ability to design, produce, and deploy semiconductors, to reduce reliance on external suppliers, and to position Europe as a competitive global hub for chip innovation and manufacturing.
The initial rollout of the Chips Act delivered mixed results. On the positive side, the policy framework succeeded in attracting a number of large-scale manufacturing projects and in creating mechanisms to bridge the often difficult transition from laboratory research to industrial application. This has laid the groundwork for stronger industrial ecosystems and closer cooperation between universities, research institutes, and private industry. However, persistent shortcomings have limited its overall impact. Subsidy allocations have been criticized as uneven, and delays in the decision-making and funding processes slowed the launch of critical projects. As a result, several high-profile initiatives failed to materialise. Large international companies postponed or scaled back investment plans as the economic environment shifted faster than the EU approval process could respond. These setbacks highlighted the need for a more agile and predictable framework if Europe is to keep pace with its global competitors.
In response, momentum has been building toward a new phase - informally referred to as “Chips 2.0.” In March 2025, nine EU Member States, among them Germany, France, Italy, Spain and the Netherlands, established the so-called Semiconductor Coalition. This alliance underscores a shared commitment to deepen cooperation, pool resources, and reinforce Europe’s presence across the full semiconductor value chain. While the EU has made progress in areas such as manufacturing and pilot lines, critical gaps remain in advanced nodes, design capabilities, and emerging segments such as chips tailored for artificial intelligence. Chips 2.0 is expected to address these challenges by creating a more robust policy and investment framework.
To prepare the ground for this next stage, the European Commission has launched a broad consultation process. Stakeholders, including industry leaders, research organisations and civil society, are invited to provide input on the effectiveness of the current Chips Act and to propose adaptations that would make the legislation more resilient to rapidly changing technological and geopolitical realities. The consultation period will run from 5 September to 28 November 2025 and will be conducted through the Commission’s online consultation portal. This exercise is an essential part of the EU’s Better Regulation principles, which require legislation to be evaluated against criteria such as efficiency, relevance and added European value.
The feedback received will inform the Commission’s evaluation report and guide possible legislative or policy adjustments. The goal is to ensure that the revised framework strengthens Europe’s capacity not only in traditional semiconductor manufacturing but also in high-value segments such as advanced packaging, next-generation materials and design software. The Commission’s adoption of the evaluation report is planned for the second quarter of 2026. This will mark the formal beginning of the Chips 2.0 program, which is expected to set more targeted priorities, streamline funding mechanisms, and foster deeper collaboration between Member States. In doing so, the EU hopes to establish a truly integrated approach that covers the full lifecycle of semiconductor technologies, from research and prototyping to mass production. If successful, Chips 2.0 could serve as a cornerstone of Europe’s broader industrial strategy, ensuring that the continent remains a global player in one of the most critical technologies of the 21st century.