European semiconductor industry groups are pushing for a revised EU Chips Act. They want research and development tied directly to real industrial deployment.
These groups advocate a deployment-oriented framework with new funding structures. They’re calling for a dedicated scale-up strategy and closer collaboration between chipmakers and end-user industries.
The goal? Speed up Europe’s leadership in key technologies and applications—especially “physical AI” in health, manufacturing, aerospace, and defence.
A deployment-oriented Chips Act: industry demands and rationale
Industry leaders say the original 2023 Chips Act and Chips Joint Undertaking didn’t involve them enough or focus on industrialisation when choosing R&D priorities. They want the revision to connect research with what the market actually needs, making it easier to move ideas from lab to factory floor.
- EU-level funding envelope: €30–60 billion dedicated to the chips value chain within a deployment framework.
- Member state contribution: €50–60 billion over seven years to complement the EU budget.
- Startup and scale-up fund: €20–30 billion to close funding gaps for early-stage ventures and high-growth companies.
Industry leaders argue for focusing long-term, flexible resources on areas where Europe could genuinely lead. Think power semiconductors, microcontrollers, analog/mixed-signal and sensor technologies, plus semiconductor equipment.
They believe these fields offer the best shot at lasting European competitiveness and strategic autonomy. Not an easy goal, but one worth aiming for.
Strategic targets and applications
The report singles out “physical AI” as a strategic target with big societal and economic impact. This covers healthcare, manufacturing, aerospace, and defence.
To lead in these areas, Europe needs focused R&D and stronger industrial capabilities. Solutions have to be deployable and scalable across different sectors.
- Healthcare: AI-enabled medical devices and diagnostics using advanced sensors and robust silicon platforms.
- Manufacturing: Sensor-rich, AI-ready systems that optimise production and predictive maintenance.
- Aerospace and defence: Secure, trusted silicon and embedded intelligence for mission-critical systems.
These targets require a broad approach—design, prototyping, manufacturing readiness, and supply chain resilience all matter. Just basic research isn’t enough.
Funding mechanisms, industrial links and IPCEI
The group wants a targeted EU fund to boost advanced chip design and forge stronger links with end users. They think joint development between chipmakers and user industries is essential.
A sector-specific start-up scaling strategy could help close procurement gaps and make private investment less risky. Better alignment with industry needs might accelerate procurement cycles, too.
- Targeted EU fund for advanced chip design to elevate design capabilities in Europe.
- Stronger end-user engagement for joint development projects between designers and users.
- Sector-specific scaling plans to ease procurement for startups and scale-ups.
- Procurement incentives to de-risk private investment and speed up tech rollouts.
- Fast-track mechanisms for Important Projects of Common European Interest (IPCEI) to shorten timelines from concept to deployment.
Security-of-supply and policy alignment
The proposals don’t just focus on manufacturing anymore—they now include design, product development, and equipment suppliers too. By widening the scope, Europe hopes to cut down on vulnerabilities throughout the entire semiconductor value chain.
This approach should help ensure smoother continuity from the first idea to the finished product. The report also pushes for a fast-track for IPCEI projects, aiming to speed up critical initiatives that have an impact across borders.
The EU wants to double its global market share to 20% by 2030, but the European Court of Auditors recently warned that the bloc isn’t on track. The revised Chips Act, with its focus on deployment and industrialisation, might just help close the gap between big ambitions and the actual rollout of Europe-made semiconductors.
By matching funding, development, and procurement with what end-users really need, Europe could boost resilience and cut dependency. There’s also a shot at faster innovation and more commercially viable silicon tech across different sectors, which honestly sounds overdue.
Here is the source article for this story: EU Chips Act 2.0 must better link R&D with deployment, industry says