The European Court of Auditors (ECA) has urged the European Commission to reassess its ambitious microchip strategy, suggesting that the EU is unlikely to meet its target of capturing 20% of the global market share by 2030.
The recommendation, outlined in a report published on Monday, calls for a “reality check” on the EU’s microchip goals despite the sector’s significant investment under the EU Chips Act.
The report acknowledged the progress made since the Chips Act came into force in 2023 as a response to the global supply chain disruptions caused by the COVID-19 pandemic. However, it warned that the investments driven by the Act are “unlikely to significantly enhance” the EU’s position in the global microchip industry.
The ECA suggests that the Commission reassess whether the ambitious targets of the Chips Act remain achievable, considering the resources at hand, global competition, and external factors such as energy costs and dependence on raw materials.
Additionally, the report recommends that the European Commission begin preparing a new semiconductor strategy in collaboration with member states and the industry. The Commission is legally obligated to evaluate the Chips Act by September next year.
The EU has set a goal to secure 20% of the global production value of cutting-edge microchips by 2030, which are crucial for industries such as automotive, smartphones, and data centers. In 2020, the EU’s share was approximately 9%.
The Commission itself forecasts a modest increase in the EU’s global share, expecting it to rise from 9.8% in 2022 to just 11.7% by 2030, despite planned increases in manufacturing capacity.
The EU is responsible for just 5% (€4.5 billion) of the estimated €86 billion required for the Chips Act by 2030. The rest is expected to come from member states and industry contributions. In contrast, top global manufacturers have allocated €405 billion for investments between 2020 and 2023, vastly overshadowing the financial strength of the Chips Act.
“The EU urgently needs a reality check in its strategy for the microchips sector,” said Annemie Turtelboom, the ECA member in charge of the audit.
“This is a fast-moving field, with intense geopolitical competition, and we are currently far off the pace needed to meet our ambitions,” she added.
In response, European Commission spokesperson Thomas Regnier stated that the EU executive “takes note” of the report but emphasized that the Chips Act “has laid a strong foundation in consolidating Europe’s position in the global semiconductor market after two decades of decline, and put Europe back on the path of growth.”
