The European Chips Act is Regulation (EU) 2023/1781, which has applied since 21 September 2023. Its stated aims are to strengthen Europe's semiconductor research and manufacturing capacity and its ability to anticipate and respond to supply disruptions. [1][2]

The act is closely associated with the EU's Digital Decade target of doubling Europe's share of global semiconductor production to 20% by 2030. According to the European Court of Auditors, the EU's share was 9.8% in 2022. [3]

Pillar one, the Chips for Europe Initiative, funds research and technology capacity: a virtual design platform, advanced pilot lines, quantum chip capacities, a network of competence centres and a Chips Fund to help start-ups and small firms access finance. It is implemented mainly through the Chips Joint Undertaking, using money from the Horizon Europe and Digital Europe programmes. [1]

Pillar two covers security of supply. It lets the Commission recognise first-of-a-kind facilities either as Integrated Production Facilities, which design and manufacture their own chips, or as Open EU Foundries, which produce chips designed by others. Recognised facilities can benefit from faster administrative procedures, and member states can support them with state aid approved under EU rules. [1][2]

Pillar three sets up monitoring and crisis response. A European Semiconductor Board of member state representatives, chaired by the Commission, coordinates implementation. The framework includes strategic mapping of the sector for early warning and, in a declared crisis, tools such as information gathering, joint procurement and priority-rated orders. [1][2]

The act does not create a single large EU fund for factories. The European Court of Auditors lists 3.3 billion euros of direct EU support under the Chips for Europe Initiative, divided among the design platform (400 million euros), pilot lines (1.86 billion euros), quantum technologies (200 million euros), competence centres (136 million euros) and the Chips Fund (550 million euros). [2]

The auditors estimate total expected investment for 2021 to 2027 at about 86 billion euros, of which around 4.5 billion euros is managed directly by the EU and about 43 billion euros is expected from the private sector, with the remainder coming from other public sources, mostly member states. [3]

The Commission's evaluation, summarised in its June 2026 proposal, says more than 52 billion euros in public and private investment has been committed to production facilities under pillar two, and that competence centres, an early-stage design platform and five pilot lines have been established. The auditors noted that the first four pilot line calls were launched in December 2023, with a fifth for photonics added in July 2024. [5][2]

Among the best-known projects, Germany approved 5 billion euros in state aid for ESMC in Dresden, a joint venture led by TSMC with Bosch, Infineon and NXP. In Leuven, the imec-led NanoIC pilot line for technologies beyond 2 nm has a total budget of 2.5 billion euros, including about 700 million euros of EU funding. Infineon opened its roughly 5 billion euro power semiconductor fab in Dresden in July 2026, supported by about 1 billion euros of subsidies. [7][11]

The most prominent setback was Intel's decision, announced in July 2025, to discontinue its planned leading-edge fab in Magdeburg, Germany, and a packaging site in Poland as part of a wider restructuring. Public incentives of 6.8 billion euros had been offered for the Magdeburg project. [10]

The European Court of Auditors' 2025 special report concluded that the Chips Act gave new impetus and is making progress, but is highly unlikely to reach the 20% target, projecting an EU share of about 11.7% by 2030. It noted that success depends on factors largely outside the Commission's control, including member state action, private investment, raw materials, energy costs and skills, and recommended a reality check and preparation of a next strategy. [3][2]

The Commission's own evaluation notes that the EU still produces less than 10% of global semiconductors and relies on the United States and Asia for advanced chips below 5 nm. [5]

On 3 June 2026 the Commission proposed a Chips Act 2.0 (COM(2026) 504), a new regulation that would repeal and replace Regulation (EU) 2023/1781. It is organised around investment and competitiveness, demand stimulation, supply-side support and resilience. Proposed measures include a maximum 12-month permitting period for strategic projects, Demand Accelerators to connect chipmakers with industrial buyers, support for first-of-a-kind projects across the whole value chain, a Semiconductor Regions of Excellence label, and a business-to-business supply chain platform with operating costs of around 70 million euros. [4][5][6]

Commentators note that the proposal moves away from a headline market-share percentage and does not contain a funding figure comparable to the first act; spending after 2027 depends on negotiations over the EU's 2028 to 2034 budget. Industry group SEMI Europe welcomed the approach. Analysts surveyed by the Central European Institute of Asian Studies welcomed the stronger focus on demand and advanced chips, while raising concerns about unresolved budgets, reliance on political relations with the United States, and a risk that support favours the few member states able to co-finance large fabs. [7][8][9]

As of September 2026 the proposal is in the ordinary legislative procedure and must be agreed by the European Parliament and the Council before it takes effect; the 2023 regulation remains the law in force until then. [5][8]

Most European Chips Act investment targets mature and specialty chips, power semiconductors and research lines rather than the leading-edge logic used in data center GPUs, which the Commission itself says Europe imports. For buyers of AI compute in Europe, near-term GPU supply therefore depends on global foundry and memory capacity, while the act matters more for longer-term resilience and for the power and networking chips that surround AI servers.

If you need compute located in the EU, use Kovara to see which European regions list the GPUs you need, compare prices with other regions, or ask Kova how European availability compares with the United States and Asia.