Chip Wars: Europe Races to Deliver on Semiconductor Sovereignty Pledge

Progress report on the European Chips Act reveals mixed results as manufacturers battle supply chain, talent, and cost challenges.

Silicon Sovereignty: The Uneven Progress of Europe's Chip Strategy

The European Chips Act, adopted in 2023 with the ambitious goal of doubling Europe's share of global semiconductor production to 20 percent by 2030, is approaching the midpoint of its implementation timeline and a comprehensive progress review conducted by the Commission in early 2026 reveals a picture of impressive ambitions, genuine progress in some areas, and sobering challenges in others. The review comes at a moment when semiconductor supply chains remain a central battleground in the US-China technology competition, and when European strategic vulnerability in this sector has been demonstrated painfully by the chip shortages that paralysed automotive and electronics manufacturing in 2021 and 2022.

The flagship investment anchoring the Chips Act is the Intel semiconductor fab being constructed in Magdeburg, Germany, with support of €10 billion in EU and German state aid. The facility, intended to produce chips using Intel's advanced 18A process technology, has faced significant construction delays and cost overruns that Intel has acknowledged publicly while reaffirming its commitment to the project. The timeline for first wafer production has slipped by roughly eighteen months from the original schedule, reflecting both the extraordinary complexity of building a world-class semiconductor facility from scratch and broader challenges in the construction and equipment supply chain for the semiconductor industry globally.

In the Netherlands, ASML continues to occupy its unique position as the world's sole supplier of extreme ultraviolet lithography machines — the equipment without which no chip manufacturer can produce advanced processors. ASML's facilities in Eindhoven are under enormous pressure to increase production capacity, with a global order backlog that extends years into the future. US export control restrictions, which have prevented ASML from shipping its most advanced EUV machines to China, have created diplomatic tensions while simultaneously confirming European leverage in the global semiconductor competition.