Europe pivots to holistic electronics strategy with Chips Act 2.0

The original European Chips Act, passed three years ago, provided a vital framework for semiconductor development. However, industry leaders argued it left significant gaps in the broader electronics ecosystem. In response, a coalition of 68 companies, 17 peer associations, and the European Space Agency lobbied for a strategy that addresses the full manufacturing spectrum, including printed circuit boards and final electronics assembly. This advocacy arrived against a backdrop of supply chain instability caused by the pandemic, the war in Ukraine, and regional conflicts in the Middle East.

Under the new proposal, part of a broader Technological Sovereignty package, eligibility for state funding expands significantly. Companies capable of building first-of-a-kind facilities can now access support for projects that go beyond chip production, encompassing the assembly and deployment of advanced electronic systems. This marks a direct attempt to reverse decades of offshoring that saw Europe lose critical market share in manufacturing. By integrating these segments, the legislation seeks to reduce the structural dependency on non-EU suppliers that currently hampers the defense, healthcare, and energy sectors.

Complementing this shift, a proposed Cloud and AI Development Act aims to incentivize the construction of domestic data centers. During a recent summit in Brussels, industry stakeholders noted that these measures are essential to buffer against rising global trade tensions. By fostering a complete manufacturing ecosystem, the European Union is attempting to secure the strategic capacity required to maintain industrial resilience in an increasingly volatile geopolitical climate.