Chip Law 2.0: What's changing, why it's coming, and how it will be implemented in Europe

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The semiconductor industry underpins a large part of our digital lives and economy, from the cars we drive to our mobile phones and cloud services. Following the recent global shortage, Europe has set out to strengthen its technological independence with a renewed roadmap: the so-called Chip Law 2.0, an ambitious review to close gaps, accelerate investments, and strengthen supply chain resilience.

The first European Chip Law came into force in 2023 with very clear goals, but market performance has forced rethink objectives, financing and executionWith all Member States aligned in a grand coalition and the Commission gathering industry input, the focus now is on translating the lessons learned into a more focused, rapid, and effective strategy.

Why does Europe need a new Chip Law?

Chips are at the heart of almost everything electronic: automotive, communications, data centers, defense, space, smart devices, gaming, and more. The recent supply crisis highlighted the extent to which concentrated global production can paralyze factories, create shortages of essential products and strain chainsTo prevent this from happening again, the EU has launched a comprehensive regulatory package that bolsters its semiconductor ecosystem.

That package, in force since 21 September 2023, combined several pieces: a Strategic Communication for the sector, the Regulation of the Chips Act itself, an amendment to the Council Regulation that created the Key Digital Technologies Joint Undertaking, and a Recommendation to Member States to monitor and mitigate disruptions in the supply chain. This framework lays the foundation for more refined public-private coordination and agile crisis response.

What does the European Chip Law aim to achieve?

The Act strengthens the European ecosystem with a focus on resilience and reducing critical dependencies. The key policy objective was double the global market share European up to 20% by 2030, a challenge that requires large-scale investment and capabilities.

To this end, it articulates five strategic objectives: strengthening research and technological leadership; enhance the capacity to innovate in advanced design, manufacturing, and packaging; create a fertile environment for scaling production by 2030; Attracting talent and overcoming the skills gap; and develop a deep understanding of the global semiconductor chain.

These five objectives are realized through three perfectly defined and complementary pillars of action, with multi-level implementation and governance instruments that seek bridging the gap from lab to factory and provide certainty to industrial investment.

Pillar I – Chips for Europe Initiative

The Chips for Europe Initiative boosts large-scale technological capabilities, from cutting-edge semiconductors to quantum technologies. Under the Chip Joint Undertaking, the five pilot lines oriented towards the development, testing and experimentation of processes, as well as small-scale production with an industrial perspective to accelerate the leap from R&D to manufacturing.

A key element are the competence centres established in all Member States and Norway, which offer companies (especially SMEs and start-ups) support services, training and access to large infrastructures created under the Law. This network facilitates access to design, prototyping, testing and packaging, and acts as a lever to democratize access to cutting-edge technology.

Pillar II – Security of supply and resilience

The EU has created a framework to attract investment and scale up manufacturing, advanced packaging, testing, and assembly capabilities, with the aim of securing supply and reducing vulnerabilities. In this context, the Commission has already approved seven State aid decisions for pioneering facilities that mobilize more than 31.500 billion euros in public and private contributions.

Among the validated projects, different technological nodes and locations stand out, configuring a balanced industrial mosaic Geographically and by specialty, with an impact on mature and cutting-edge manufacturing, and high-value packaging:

Company	Member state	Location	Total investment (billions of €)	Technology
STMicroelectronics	Italy	Catania	0,73	SiC wafers
STMicroelectronics & GlobalFoundries	France	Crolles	7,5	300 mm FD-SOI
STMicroelectronics	Italy	Catania	5	SiC devices
ESMC (TSMC + Bosch/Infineon/NXP)	German	Dresden	> 10	CMOS, FinFET
Silicon Box	Italy	Novara	3,2	Advanced packaging
Infineon	German	Dresden	4,46	Discrete, analog/mixed signals
am OSRAM	Austria	Premstätten	0,567	CMOS

In addition, other proposals are still in preparation, while the Commission has published guidelines for recognition as integrated production facility , as a EU open casting, in order to simplify procedures, prioritize access to pilot lines, and provide greater regulatory visibility to investors.

Pillar III – Crisis monitoring and response

The European Semiconductor Council (ESCB), composed of representatives of the Member States and chaired by the Commission, is the axis of governance and coordination. Its mission is to map the value chain, monitor early warning signals, and activate emergency measures in the face of supply disruptions, continuing the work of the previous European Semiconductor Expert Group.

The Semicon Coalition Statement: Towards the "Chip Law 2.0"

In September 2025, the 27 Member States signed the Declaration of the Semicon Coalition, calling for a revised and forward-looking Chip Law. The petition emphasizes addressing vulnerabilities, seizing technological opportunities, and strengthening a European ecosystem resilient to global shocks.

In parallel, the Commission launched a public consultation and a call for data on September 5, 2025, to assess the current performance of the Act and propose adjustments. The entire value chain (and adjacent sectors) is invited to share evidence and recommendations to help Europe compete globally and cement its technological sovereignty.

Europe adjusts its expectations and accelerates the pace

The 2023 Law mobilized more than 43.000 billion euros in various items, with the aspiration of reaching the 20% of world production of chips by 2030. However, the European Court of Auditors and other analyses have indicated that, given the current situation, the realistic horizon is around 11,7% by the end of the decade.

In this context, the proposed "Chip Law 2.0" seeks to quadruple the mobilized investment, ensure more targeted public support, and accelerate the approval of critical infrastructure. The industry has responded with support: entities such as SEMI (which represents some 3.000 companies) and nearly 50 companies in the sector—including NVIDIA, ASML, Intel, STMicroelectronics and Infineon—endorse this more surgical approach.

The review also aims to correct execution flaws, including the difficulty in retain and attract large-scale projects, following episodes such as Intel's reversal of a factory in Germany. Prioritizing specific bottlenecks in design, manufacturing, and packaging can make the difference in gaining ground in key segments.

Five strategic axes shared by the Member States

1) Industry-research-SME collaboration

The proposal is to forge pan-European alliances that integrate large manufacturers, SMEs, and start-ups with research centers, promoting complementary ecosystems. The goal is to strengthen the value chain from suppliers to end markets, accelerating technology transfers and new business models.

2) Harmonization of public and private financing

The Declaration calls for coordinating European and national instruments, streamlining strategic project approvals, and mobilizing private capital on a large scale. This financial convergence should underpin the sector's sustainability, with a project pipeline robust and predictable.

3) Training and attracting talent

A decisive push is being made to develop advanced technical skills in microelectronics, with educational and continuing education programs that respond to the demand for qualified profiles. Without a sufficient talent base, it's impossible to scale. manufacturing, design and packaging in Europe.

4) Chips for the ecological transition

Microelectronics is a lever for decarbonization: energy efficiency, power, sensors, and control. Europe wants to promote the development and production of cleaner and more sustainable components, aligned with their environmental goals and with traceability throughout the entire value chain.

5) International collaboration with like-minded partners

Emphasis is placed on forging strategic relationships to secure critical raw materials, diversify suppliers, and strengthen resilience to global disruptions. This alliance agenda aims to avoid excessive dependencies and open markets for the industry European.

SEMICOM: a platform to coordinate efforts

Formed in March 2025, the SEMICOM coalition comprises Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Poland, and Spain. Its purpose is to foster a coordinated response to international competition and technological dependence on third parties, consolidating capabilities and maximizing the impact of resources.

The recently presented Joint Declaration is the first major fruit of this multilateral effort, now supported by all Member States. SEMICOM aims to synchronize industrial agendas, reduce vulnerabilities and accelerate the implementation of key projects across the continent.

Spain: national policies in line with Brussels

Spain is moving forward in parallel with the EU framework with the PERTE Chip (more than 12.000 billion euros) to boost the national value chain. Sociedad Española para la Transformación Tecnológica (SETT), created in July 2024, manages these investments and other initiatives such as Next Tech or Spain Audiovisual Hub, channeling public-private co-investment towards productive and technological capacities.

Spain's focus is on attracting projects, increasing local production, and facilitating technology transfer from research to industry. With a specialized structure, Spain seeks gain speed of implementation and position itself in segments where it offers comparative advantages (power, automotive, design, packaging, testing).

Global context: The US proposal and the domino effect

On the international stage, the US administration has introduced a 1:1 trade framework for AI chips: for every imported chip, produce another one on domestic soil, under penalty of high tariffsThe measure aims to promote industrial sovereignty, but raises concerns about its immediate impact on supply chains.

Building state-of-the-art factories is not quick: the example of Intel in Ohio, whose megafactory announced in 2022 would now target 2030, illustrates the real timeframes. TSMC, for its part, has committed $100.000 billion over four years to expand its AI chip production in the US, although a 1:1 approach could unbalance the market in the short term.

For Europe—with its European Chips Act—and for countries like Spain (PERTE Chip), this protectionist shift is a wake-up call: external dependence remains a risk. If chip flows become more expensive or are restricted, sectors such as the automotive, banking, digital services, or defense industries could face cost overruns and delays in critical supplies.

What professional offices should monitor

The new framework increases regulatory and contractual complexity. For consulting firms, advisory services, and law firms, it opens up new avenues for adding value: identifying clients with high supply risk, renegotiate contracts and anticipate fiscal and industrial implications.

• Customers exposed to supply risks: especially in technology, automotive, finance and hardware-intensive sectors.
• Increase in litigation and contractual inquiries: due to delays, force majeure clauses and reconfiguration of agreements.
• Public aid and subsidies: guidance for applying for EU and national instruments (PERTE Chip, digitalisation).
• International taxation and tariffs: analysis of the impact of protectionist measures on imports and operations.

Official documents and resources

The European Commission accompanies the implementation with reference materials and guides (including download widgets on their portals), as well as administrative guidelines for integrated production facilities and open foundries, which facilitate priority access to pilot lines.

Medium-term outlook

Over the coming months, the review of the Chip Law will integrate technical and policy input from governments and industry. The Semicon Coalition Declaration seeks to direct resources toward a shared strategy, with measures that align financing, talent and productive capacity to compete with the major technology hubs.

If Europe executes quickly, adjusts incentives and accelerates critical projects, it can turn its ambition into tangible results: more production on European soil, more diversified supply chains, and a talent base capable of fueling the next wave of AI, automotive, energy and defense without being left behind due to a lack of chips.