In response to these challenges, the Commission plans to develop a 'Chips Act 2.0' to set clearer and more realistic objectives based on past experiences.

ECA member Annemie Turtelboom emphasized the need for the EU to reassess its microchip strategy amid intense competition from major players like China and the US.

The EU launched the Chips Act in 2023 with the ambitious goal of capturing a 20% share of the global semiconductor market by 2030, aiming to reduce reliance on foreign suppliers.

The ECA identified several critical issues, including overly ambitious goals, inadequate funding compared to major semiconductor companies, and fragmented financial responsibilities among EU member states.

However, a recent report by the European Court of Auditors (ECA) suggests that this target is unlikely to be met, calling for a 'reality check' on the EU's microchip strategy.

The current focus of the Chips Act is on meeting existing industry needs, rather than anticipating future trends in AI and efficient chip designs.

The ECA predicts that by 2030, China will surpass Taiwan as the leading chip manufacturer, capturing 22% of the market, while the EU is expected to manufacture only 8%.

While the European Commission has made some progress, the pace is deemed too slow, hindered by insufficient and fragmented funding.

In contrast, leading global manufacturers like TSMC and Samsung have allocated significantly more resources, with investments totaling €405 billion from 2020 to 2023, highlighting a competitive disadvantage for the EU.

Key challenges facing the EU's semiconductor ambitions include reliance on raw material imports, high energy costs, and geopolitical tensions that complicate the landscape.

Despite the launch of the Chips Act, the ECA concludes that investments from the Act are unlikely to significantly improve the EU's competitive position, projecting only an increase to 11.7% market share by 2030.

The lack of mandatory reporting from member states on Chips Act projects creates significant oversight challenges for the European Commission.