The EU is revamping its semiconductor strategy with a focus on building a competitive ecosystem that advances materials, chip design, manufacturing, and supply resilience, especially during global disruptions.

This new approach emphasizes five priorities: fostering collaboration, boosting investment, developing skills, promoting sustainability, and strengthening international partnerships.

EU policymakers from countries like the Netherlands and Ireland stress the importance of adapting Europe's industrial strategy to geopolitical tensions to achieve strategic autonomy and economic growth.

The initiative aims to help the EU reach its 2030 goal of capturing 20% of the global chip market, a target industry experts and auditors believe is unlikely under current policies, which project only about 11.7%.

The European Court of Auditors has criticized existing policies for being insufficient, citing issues like talent shortages, slow regulation, and weak financial support as major hurdles.

Originally, the EU's Chips Act aimed to increase Europe's share of global semiconductor production from around 10% to 20% by 2030, with over 43 billion euros in planned investments, but this target is now seen as potentially unrealistic.

The initial Chips Act failed to attract significant investments in cutting-edge production, exemplified by Intel's decision to abandon plans for a new German facility, highlighting the need for a more strategic approach.

A new coalition seeks to improve upon the slow procedures and limited funding of the 2023 Chips Act by enabling faster, more strategic investments across all EU member states.

Recent geopolitical challenges, including US tariffs, China's subsidized chip flooding, and major companies like Intel retreating from Europe, underscore the urgency for a stronger EU semiconductor strategy.

While the US has invested heavily through the CHIPS and Science Act of 2022, recent political shifts have altered funding strategies, emphasizing the need for Europe to bolster its own capabilities.

Europe's current share of global semiconductor capacity is about 9%, projected to decline to 8% by 2030, with Asian countries dominating exports and US companies profiting from chip sales.

The coalition highlights critical bottlenecks like skilled labor shortages, lengthy regulations, and weak financial frameworks that threaten Europe's semiconductor ambitions.

The European Court of Auditors recommends an urgent strategic review to make the EU's chip industry goals more achievable, emphasizing the need for a reality check.