European Commission proposes Chips Act 2.0 to address semiconductor demand

The European Commission is developing a Chips Act 2.0 designed to address both the supply and demand sides of the semiconductor industry. While global chip sales are projected to reach $1 trillion this year and $1.6 trillion by 2030—driven largely by AI data centers—Europe currently produces less than one-tenth of the world's semiconductors and meets only about one-fifth of its own internal demand.

To bolster technological sovereignty, the new framework includes initiatives such as 'Grand Challenges,' industry-led 'Demand Accelerators,' and public procurement for innovative solutions. The proposal also aims to streamline the industry by offering 'first-of-a-kind' investment status, which facilitates state aid and caps permitting processes at 12 months. Additionally, the act provides dedicated support for specialized sectors like quantum chips and photonics to ensure Europe remains competitive in manufacturing equipment, specialty materials, and power and sensor chips.