European Commission prepares Chips Act 2.0 to boost semiconductor resilience

The European Commission is preparing a Chips Act 2.0 aimed at strengthening Europe’s semiconductor resilience, reducing strategic dependencies, and supporting technological sovereignty.

The initiative builds on earlier legislation introduced after pandemic-related supply chain disruptions, but seeks to address persistent gaps in advanced chip manufacturing and fragmented governance across Member States.

A key focus of the revised framework is expanding Europe’s capacity in advanced semiconductors, particularly chips below 10 nanometres that are used in AI, high-performance computing, defence and advanced automotive systems.

The proposal also aims to improve monitoring of supply chains and market actors, while simplifying regulatory processes and enhancing investment conditions for strategic semiconductor projects.

Alongside production capacity, the initiative is expected to strengthen oversight of supply chain risks and improve crisis preparedness within the EU semiconductor ecosystem. Policymakers have identified limited visibility into supply-chain risks, including technology leakage and dependence on suppliers outside the EU, as a structural weakness.

The initiative is also expected to form part of the EU’s broader digital sovereignty agenda, including support for semiconductor research, chip design capabilities and cross-border industrial coordination.

Why does it matter? 

Semiconductors are essential components in technologies ranging from AI systems and telecommunications networks to defence equipment, energy infrastructure and vehicles. The concentration of advanced chip production in a small number of global locations has heightened concerns about supply-chain resilience and strategic dependencies.

By expanding manufacturing capacity and improving oversight of supply chain risks, the EU aims to strengthen its ability to withstand disruptions while supporting long-term competitiveness in a critical technology sector.

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