EU Chips Act: Path to Tech Independence
11 July 2025
Where does Europe’s industrial strategy stand in securing the supply of electronic components? An update on the progress of the Chips Act, between long-term goals and persistent structural hurdles.
The global semiconductor market is currently highly imbalanced: the United States dominates design (thanks to a 70% share of the EDA market, together with the EU), while manufacturing is concentrated in Asia, particularly in the hands of TSMC in Taiwan, which alone produces 92% of chips under 10 nanometers.
China, for its part, controls much of the packaging phase and accounts for around 20% of global wafer production. This extreme geographic specialization makes the supply chain particularly vulnerable to external shocks, such as political tensions or logistical disruptions, highlighting the urgency for the EU to reduce its dependence on unstable regions or strategic competitors.
In recent years, tensions between the United States and China have led to an escalation of tariffs and export restrictions: the US has introduced duties exceeding 100% on certain Chinese technologies and has limited Beijing’s access to critical technologies for the production of advanced chips.
This situation has prompted key players in the industry to rethink their production strategies. TSMC, for example, launched a $100 billion investment to build new factories in Arizona, but has stated that this move will result in a 30% increase in costs—highlighting how reshoring improves security but not economic efficiency.
Meanwhile, Europe has launched several key initiatives to strengthen its industrial base, but global competition is intensifying, and other regions still hold a significant lead.
Within the framework of the Chips Act, several strategic industrial projects have already been launched. In Germany, TSMC, in collaboration with Bosch, Infineon, and NXP, has begun building a new semiconductor plant in Dresden. The project is supported by a total investment of around €10 billion, of which €5 billion is financed by the German government. The facility, expected to be operational by 2027, will produce advanced chips mainly for the automotive industry.
Italy was also at the center of an ambitious plan: in 2022, Intel announced up to €4.5 billion for an advanced assembly and packaging plant. However, the project was put on hold in 2024 pending more favorable market conditions and better Intel financials.
Beyond facilities, the EU has also focused on training, with the creation of the European Chips Skills Academy (ECSA) to bridge the gap in specialized skills. The European Investment Bank (EIB) has also provided funding to support NXP’s research and development. Finally, the European Commission has approved funding for Infineon’s new 300mm wafer production plant in Dresden.
Despite the investments promoted by the Chips Act, fragmentation among the industrial policies of individual EU Member States risks limiting the EU’s impact in the global semiconductor race. The lack of centralized coordination hinders the creation of strong, synergistic ecosystems, weakening the continent’s ability to attract investment, nurture talent, and achieve strategic goals by 2030.
Construction times and costs for factories also remain a major hurdle. In the United States, building a plant takes twice as long and costs twice as much as in Taiwan, and Europe may face similar obstacles. According to The Guardian, the European strategy remains “deeply disconnected from reality” unless a major scale-up in actual implementation is achieved.
The international landscape is increasingly competitive: according to a SEMI report, 18 new semiconductor factories will be built worldwide in 2025 alone—but only 3 will be in Europe or the Middle East.
If the EU truly wants to compete, it must accelerate implementation, avoid fragmentation among Member States, and invest more decisively across the entire value chain—from training to logistics to environmental management, such as sustainable water usage.
What’s at stake is not just technological sovereignty, but Europe’s ability to remain relevant in the world of tomorrow.
Moreover, the ongoing changes to the tariffs imposed by Trump, once again postponed to August 1st, are only worsening an already chaotic situation. It remains to be seen whether this instability becomes the new long-term norm to which we must adapt, or whether there is hope for a shift toward a more stable and predictable scenario.
Further complicating the picture in Italy, delivery times for materials are starting to lengthen, frequently notably extending the lead times originally indicated at the time of order. This is due to the production halts in many factories, reigniting a dangerous cycle for the supply chain — a dynamic already experienced in the past with significant consequences.
Amid the transformation driven by the European Chips Act, one strategic player could make a real difference: the independent distributor of electronic components.
If Europe truly wants to build a technologically autonomous and competitive future, the contribution of independent distributors—such as Electronic Partner—will be essential.
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