European Commission plans €525m chip package for young companies

The European Commission said the package is meant to improve Europe's weak position in the technology and to catch up with China and the United States in chip production. European firms account for less than 1% of worldwide chip design revenue, according to the Commission.

Handelsblatt reported that €285m would come from the EU budget and €240m from states participating in the European chip programme. The EU is also working with non-EU states to reach its chip target, the newspaper reported. Participants in the programme include several EU countries, Israel, Turkey and the UK; Germany is not among them.

The gap the money targets

The EU originally targeted a 20% share of global semiconductor manufacturing by 2030; the Brussels authority puts its current share at around 10%, Handelsblatt reported. EE Times reported that the European Court of Auditors concluded in 2025 that the strategy is "very unlikely to be sufficient" to achieve the Digital Decade target of a 20% EU share in the global market value chain by revenue by 2030, and that the EU's share is projected to reach 11.7% by 2030.

A European Commission analysis published in June 2026 put total fab production costs in the EU 40% to 50% higher than in Taiwan, South Korea and China. In 2024 the EU consumed €55bn worth of semiconductors and imported €43.6bn from outside the bloc. Europe's vulnerability is greatest in leading-edge chips for AI and high-performance computing, the analysis found.

Budget fight adds uncertainty

Negotiations over the EU's 2028-2034 budget are deadlocked, leaving financial allocations after next year unknown. Politico reported that Europe's push to accelerate AI chip production is among the files caught in the logjam. Politico did not say whether the €525m package is affected.

"There's an increase in sectoral legislation with objectives that require multiannual budgetary commitments," said a person involved in talks on the EU budget, who was granted anonymity to discuss closed-door negotiations. "But the budget talks are disconnected from the policy discussions."

Policy context

The €525m package comes as the Commission's proposed Chips Act 2.0, published in June 2026, is targeted for adoption in the second quarter of 2027, EE Times reported. The proposal broadens the focus beyond advanced fabs to the entire semiconductor value chain, from chip design and equipment to materials and advanced packaging. It also aims to scale up pilot lines and bring research closer to commercial production.

EE Times reported that better access to patient capital could help startups scale up. Handelsblatt's report did not include eligibility rules, selection criteria or a timetable for the €525m package.