European Chip Law 2.0: What Changes and Why It Matters

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The semiconductor industry is experiencing a turning point and Europe has decided to take action with a thorough review of its regulations, known as Chip Law 2.0What is on the table is not a simple technical adjustment: we are talking about changes to accelerate investments, strengthen capacities and protect the resilience of a supply chain that has proven critical for the economy and for the strategic security.

In recent weeks, the 27 Member States have endorsed a Joint Declaration that sets out the direction of this review, with five clear priorities and the coordinated drive of an unprecedented coalition of state and industry. In parallel, Spain It is activating its own levers (PERTE Chip and the SETT) so that the effect of the community agenda translates into real capabilities in our territory.

What is the European Chip Law and why is it being revised?

The current European Chip Law It entered into force on September 21, 2023, as part of a comprehensive package to strengthen the EU semiconductor ecosystem. The regulation was born with a clear ambition: to double Europe's global market share to 20% by 2030, reducing external dependencies and strengthening the bloc's technological sovereignty.

His approach is based on Five major goals: Drive leadership in R&D, enhance advanced design and packaging, establish a stable framework for scaling production, close the talent gap, and develop a deep understanding of global supply chains. All with a focus on smaller, faster chips and next-generation capabilities.

To put it into practice, the law is organized into three pillars of actionPillar I (Chips for Europe Initiative) funds technological capabilities, pilot projects, and competence centers that support businesses, especially SMEs and startups. Pillar II prioritizes security of supply and resilience, attracting investment and simplifying procedures. Pillar III creates a system of crisis monitoring and response through the European Semiconductor Council (ESCB), which coordinates Member States with the Commission.

The experience gained from the pandemic, global bottlenecks, and the investment rush from other blocs (the United States and Asia) have shown that Europe needs to fine-tune its strategy. Hence, a new phase has been opened. forward-looking review —popularly dubbed Chip Law 2.0— to correct weaknesses, accelerate projects, and ensure that goals are achievable and measurable.

The SEMICON/SEMICOM Coalition and its Declaration at 27 are born

In March 2025, a coalition led by the Netherlands and eight Member States was formed, which in a short time has gained the support of the 27 EU countries and a large industrial block. In several sources it appears as SEMICON or SEMICOM, but its purpose is unequivocal: to align governments and industry for ambitious and practical regulatory reform.

On 29 September 2025, the coalition officially handed over to the European Commission a Joint declaration which summarizes the political priorities of the review. Dutch Minister Vincent Karremans formalized the document's transmission, underscoring the need to adapt the European industrial strategy to a more tense geopolitical environment and growing demand linked to AI, automotive, energy, and defense.

Private support has been notable. More than 50 companies and sector associations subscribe to the orientation of the text: SEMI (which groups around 3.000 companies), NVIDIA, leader in GPUsASML, Intel, STMicroelectronics, and Infineon, among others. This backing adds muscle and credibility to an agenda that seeks to rapidly scale investments and capabilities.

In addition to the Declaration, the Commission launched on 5 September 2025 a public consultation and a call for data to gather input from across the entire value chain. This open participation will allow the reform to be tailored to the real needs of those who design, manufacture, package, and use chips in Europe.

The five priorities that will guide the review

• Industry-research and SME alliances: boosting complementary ecosystems, connecting large manufacturers with startups, SMEs and R&D centers. The goal is to foster robust value chains, from suppliers to end markets, and support European leaders in innovation.
• Harmonized and agile financing: coordinate EU and national funds, accelerate approvals of strategic projects and mobilize private capital. It is suggested that this be reflected in the next Multiannual Financial Framework and, according to the proposal, a specific budget for semiconductors.
• Talent and skills: deploy advanced training programs, facilitate the exchange of researchers, and create a possible European Skills Programme in Chips. The shortage of technical profiles is already a bottleneck for new projects.
• Ecological transition: promote cleaner designs and manufacturing, with the replacement of hazardous substances, the use of renewable energy, water efficiency, and materials circularity. Semiconductors will be key to a low-carbon economy.
• International cooperation: strengthen ties with like-minded partners within and outside the EU, secure critical materials, diversify the supply chain and attract external strategic capabilities that strengthen the ecosystem European.

From 20% ambition to realistic and measurable goals

The current law set the goal of achieving 20% of the world market chip production by 2030. However, various recent analyses indicate that, at the current pace, Europe would close the decade around 11,7%In fact, the Semiconductor Industry Association (SIA) estimated a European market share of around 9,2% by 2024, behind the United States and South Korea.

The first wave of the Chip Law (2023) mobilized about 43.000 millones de euros between public and private funds, but it has fallen short of the intended leap. In parallel, the United States activated its CHIPS and Science Act and its Inflation Reduction Act, triggering investments of tens of billions and attracting key projects. In Europe, there have even been setbacks, such as the rethinking of Intel regarding a new factory in Germany.

With the 2.0 package, Member States and industry are pushing to multiply by up to four the investment current, streamline permits and access to critical design and manufacturing technologies. The idea is to move beyond the "desktop" and toward decisions that translate into concrete industrial capabilities, from wafers and packaging to testing and assembly.

The focus is no longer just on “gaining market share,” but close vulnerabilities: availability of critical materials, advanced packaging capacity, reduced exposure to bottlenecks, and regulatory acceleration. Europe wants to compete on its own merits, with sufficient resilience and critical mass to avoid falling behind.

Pillars, governance and authorized projects

The Chips for Europe Initiative (Pillar I) funds pilot lines for R&D, testing, and prototyping with small-scale production. These platforms bridge the gap in laboratory to factory, enabling accelerated technology transfer and process scaling. The Competence Centers, already deployed in all Member States and Norway, specifically support SMEs and startups with training, access to infrastructure, and technical support.

Pillar II prioritizes investments in manufacturing, advanced packaging, testing, and assembly. To facilitate its deployment, the Commission has published orientations streamlining procedures for EU integrated production facilities and open foundries, facilitating priority access to pilot lines and reducing administrative hurdles.

In this framework, the Commission has already approved seven State aid decisions for pioneering facilities, with a total volume (public and private) exceeding €31.500 billion. Projects include: STMicroelectronics in Catania (Italy) with SiC wafers and devices; ESMC joint venture (TSMC + Bosch/Infineon/NXP) in Dresden, Germany, with CMOS and FinFET technologies; STMicro and GlobalFoundries in Crolles, France, with 300 mm FD-SOI; Silicon Box in Novara, Italy, for advanced packaging; Infineon in Dresden, Germany, for discrete and analog/mixed signal; and ams OSRAM in Premstätten, Austria, with CMOS technologies.

Pillar III establishes the European Semiconductor Council (ESCB) as a coordination mechanism to map the value chain, anticipate risks, and activate emergency measures if supply crises are detected. The governance consolidates the previous work of the European Semiconductor Expert Group, now integrating Member States under the leadership of the Commission.

Spain's role: PERTE Chip and SETT

Spain supports the community strategy through the PERTE Chip, endowed with more than 12.000 billion euros, and the Sociedad Española para la Transformación Tecnológica (SETT), created in July 2024. The SETT manages PERTE funds and other instruments such as Next Tech or Spain Audiovisual Hub, with a focus on public-private co-investment and technology transfer.

The PERTE Chip aims to reinforce the national value chain In microelectronics and semiconductors: attracting plants and design centers, promoting advanced packaging, capitalizing on photonics capabilities, and strengthening connections between universities, research centers, and leading companies.

Beyond the major projects, public procurement data show a steady stream of investment in technology components. According to TendersTool (formerly Adjudicaciones TIC), nearly 100,000 projects were awarded in 2024. 110 millones de euros in 737 contracts. Among the main bidders were the Andalusian Public Education Agency (27 million; 49 contracts), the Madrid City Council's IT Department (18 million), and the Telecommunications and Information Technology Center of the Generalitat de Catalunya (11 million; 5 contracts).

In 2025 (January–September), the amount awarded is around 98 millones de euros in 343 contracts. Among the suppliers with the largest volume are Econocom Products & Solutions (21 million; 36 contracts), Inforein (18 million in a large transaction), and Infoser New Technologies (12 million; 2 contracts). Although not everything is microelectronics, these figures reflect a institutional drive supported by ICT hardware and services that helps create demand and critical mass.

What the Chip Law 2.0 aims for

The review aims to address the bottlenecks identified in the first phase. Measures under discussion include a specific budget for semiconductors, express processes to approve large investments in factories and infrastructure and mechanisms that ensure access to process nodes such as 2 nm y IP design and manufacturing criticisms.

It is also proposed to strengthen the cross-border alliances in R&D, design, and advanced packaging; and expanding the range of financial instruments to attract private capital, including co-investment options and guarantees that reduce the technological risk of projects.

The talent component is transversal: it is necessary to increase the supply of technical profiles (process engineering, circuit design, test and validation, integrated photonics, materials chemistry, packaging, etc.) and facilitate their mobility throughout Europe. The proposal for a European Chip Skills Program goes in this direction.

Finally, sustainability is integrated as a competitive vector. Chip manufacturing consumes water, energy, and materials, so the Agenda 2.0 prioritizes water efficiency, renewables, substitution of hazardous substances and circular strategies for waste and by-products, aligned with EU climate objectives.

A truly strategic sector

Semiconductors underpin key industries: automotive, telecommunications, computing, defense, space, healthcare, energy, and consumer electronics. Following the global chip shortage, it became clear that a disruption in the supply chain could halt assembly lines, disrupt medical devices, or slow the energy transition.

The wave of artificial intelligence has triggered the demand for accelerators, high-bandwidth memory and solutions packaging Heterogeneous. Whoever dominates these links will dominate much of the added value of the next decade, which explains the race to attract investment, forge alliances, and develop their own capabilities.

Europe already has differential assets - lithographic equipment ASML, leadership in automotive and energy, solid scientific base—but it needs to densify its industrial network and ensure access to critical materials. Hence the Declaration's emphasis on internationalizing alliances with like-minded countries, diversifying suppliers and attract capabilities complementary to the continent.

In parallel, the EU maintains an institutional channel to access official content, including reference documents and public downloads related to the evaluation of the law and open consultation. These sources help inform the design of the reform with evidence and verified data.

SEMICOM as a cooperation platform

The SEMICOM coalition — Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Poland and Spain— was born with the aim of coordinating efforts and avoiding duplication. Its first tangible milestone is the Declaration of Priorities, which now has the support of all Member States, consolidating a single voice within the European Commission.

The philosophy is pragmatic: build pan-European industrial alliances, take advantage of economies of scale and direct resources to segments where Europe can be an essential (processing power for AI, discrete power for electric automotive, photonics, FD-SOI, sensors, advanced packaging…). Success will depend on turning the strategy into factories, tooling and qualified employment.

This shared approach seeks to reduce vulnerabilities, maximize the impact of funds, and offer regulatory certainty to investors and developers. In essence, it aligns technological sovereignty, prosperity economic and resilience, the three vectors that the Declaration identifies as the axes of reform.

What to expect in the coming months

The Commission will incorporate technical and policy input from Member States and industry from the public consultation. recommendations The SEMICOM Declaration will likely serve as a basis for adjusting financing, processing and international cooperation.

If the process continues, we will see a practical shift: faster investment decisions, prioritized strategic projects, talent reinforcement, and sustainability mechanisms built in from the ground up. All of this, accompanied by clearer metrics to measure whether Europe is truly on track. bridging the gap with the major global semiconductor hubs.

The key will be execution: coordination across institutional levels, stable rules, and a financial window that allows the industry to move at the speed the market demands. The goal is no longer just 2030, but laying the foundations for the next decade. innovation in microelectronics.

The revision of the Chip Law opens a real window of opportunity for Europe: consolidate a competitive, sustainable and resilient semiconductor ecosystem supported by alliances, coordinated financing, talent and international cooperation; if political ambition is transformed into tangible industrial projects and through agile procedures, Europe will have taken the decisive step it had been promising for so long.