European Chips Act

Why do we need a European Chips Act?

Chips — also known as semiconductors — are the building block of all electronic products. They play a central role in our modern economies and our daily lives. Chips underpin the digital transformation and are essential to all industries, such as the car industry, communications, data processing, space, defence, smart devices and gaming, to name a few.

The recent global chips shortage has disrupted supply chains, caused product shortages ranging from cars to medical devices, and in some cases even forced factories to close.

The European Chips Act Regulation was proposed as part of a broader package of measures for strengthening the EU’s semiconductor ecosystem. It entered into force on 21 September 2023.

This package included:

• A Communication outlining the rationale and the overall semiconductor strategy
• A proposal for a Chips Act Regulation, which was adopted by the Council and the Parliament on 13 September and entered into force on 21 September 2023
• A proposal for amendments to a Council Regulation establishing the KDT Joint Undertaking, which was adopted by the Council on 25 July and entered into force on 21 September 2023.
• A Recommendation to Member States, promoting actions for immediate monitoring and mitigation of disruptions in the semiconductor supply chain

What is the European Chips Act?

The European Chips Act will reinforce the semiconductor ecosystem in the EU, ensure the resilience of supply chains and reduce external dependencies. It is a key step for the EU’s technological sovereignty. And, it will ensure Europe meets its digital decade target of doubling its global market share in semiconductors to 20%.

It focuses on five strategic objectives:

1. Strengthening research and technological leadership
2. Building and reinforcing Europe’s capacity to innovate in the design, manufacturing and packaging of advanced chips
3. Putting in place an adequate framework to increase production by 2030
4. Addressing the skills shortage and attracting new talent
5. Developing an in-depth understanding of global semiconductor supply chain

The five objectives will be achieved through three pillars of action.

Pillar I - The "Chips for Europe" Initiative

This initiative supports large-scale technological capacity building and innovation throughout the Union and enables the development and deployment of cutting-edge, next generation semiconductor and quantum technologies.

Under this initiative, the Chips Joint Undertaking is supporting five pilot lines for the purpose of process development, test and experimentation, as well as small-scale production. These will serve as a platform for European research and development with an industrial perspective to bridge the gap from lab to fab.

All Member States and Norway have now established competence centres, which provide businesses (especially SMEs and start-ups) with essential resources to develop semiconductor solutions, including support, training, and access to large infrastructure facilities established under the Chips Act.

Pillar II - Security of supply and resilience

A framework has been set up for the security of supply and resilience of the EU’s semiconductor sector, thereby attracting investments and enhancing production capacities in semiconductor manufacturing, advanced packaging, test, and assembly. 

This has contributed to increasing the EU’s market share vis-à-vis competitors. The Commission has already approved seven State aid decisions on first-of-a-kind semiconductor facilities that represent a total public and private investment of over EUR 31.5 billion:

Several projects are still under development or in the pipeline. Under this pillar, the Commission published guidance for obtaining the the Status of integrated production facility and open EU foundry, which streamlines administrative processes and prioritises access to pilot lines for semiconductor facilities.

Pillar III - Monitoring and crisis response

The European Semiconductor Board serves as coordination mechanism between the Member States and the Commission for mapping and monitoring the Union’s semiconductor value chain as well as preventing and responding to semiconductor crises with ad-hoc emergency measures.

The European Chips Act's governance is overseen by the European Semiconductor Board (ESB), comprising representatives from Member States and led by the Commission. The composition of the board is documented in the Register of Commission Expert Groups and Other Similar Entities. The board continues the efforts initiated by the European Semiconductor Expert Group, as established by the Commission Recommendation on a common Union toolbox to address semiconductor shortages and an EU mechanism for monitoring the semiconductor ecosystem.

The European Chips Act's governance is overseen by the European Semiconductor Board (ESB), comprising representatives from Member States and led by the Commission. The composition of the board is documented in the Register of Commission Expert Groups and Other Similar Entities. The board continues the efforts initiated by the European Semiconductor Expert Group, as established by the Commission Recommendation on a common Union toolbox to address semiconductor shortages and an EU mechanism for monitoring the semiconductor ecosystem.

The Declaration of the Semicon Coalition

In September 2025, the Semicon Coalition, composed of the 27 Member States have signed a Declaration setting out their ambition for a Chips Act 2.0., calling for the need to address vulnerabilities, seize technological opportunities, and build a resilient semiconductor ecosystem.

In parallel, the Commission opened a public consultation and call for evidence on 5 September 2025. Stakeholders from across the semiconductor value chain and beyond are invited to share their views on how the Chips Act is performing today and how it should be adapted to ensure that Europe can compete globally and strengthen technological sovereignty.

Other EU initiatives in the field of semiconductors

The European Chips Act complements EU initiatives already underway in the area of semiconductors, such as:

• The Alliance on Processors and Semiconductor Technologies
• Programmes and actions in research and development such as Joint Undertakings, Horizon Europe and the Digital Europe Programme
• The Important Project of common European interest (IPCEI) on microelectronics and communication technologies.
• Support via RFF funding