The EU chips industry
The EU chips act recognises the essential role microchips play in everything from consumer electronics to critical infrastructure and their important contribution to the EU’s competitiveness.
What are chips and why are they important?
Microchips (also called chips or semiconductors) are tiny sets of electronic circuits created on a small flat piece of silicon.
A chip the size of a fingernail can hold billions of transistors – microscopic switches – that control electronic signals.
Chips can capture, store, process and act on data. They are the DNA of modern technology.
Chips uses
Everyday life
Chips power our smartphones, laptops, games consoles, modems, televisions and home appliances.
Critical applications
Chips are vital in the automotive industry, aviation and healthcare, including in medical diagnostic equipment.
Key infrastructures
Chips play a fundamental role in energy, defence, mobility, data and communication systems.
EU semiconductor device market share
The EU’s semiconductor market is made up of a diverse mix of end-user segments, each of which plays an increasingly import role in meeting the global demand for chips.
Bar chart showing EU end-user semiconductor device market share in 2023 per sector:
- automotive 39%
- industrial 23%
- communications 12%
- consumer 7%
- computer 1.4%
The EU chips act
Many actors around the world are involved in manufacturing chips. They collaborate and trade products, often via complex and vulnerable supply chains.
Specific technologies and activities are concentrated within a limited number of companies and regions.
Objectives
The EU chips act, adopted in July 2023, addresses the key challenges facing the semiconductor industry, with a view to:
- mitigating shortages
- enhancing self-sufficiency and reducing dependency on foreign actors
- creating good-quality jobs and business opportunities
The new rules aim to double the EU’s global market share in semiconductors by 2030, in order to bolster Europe’s semiconductor ecosystem and reduce reliance on external suppliers.
Three pillars
Chips for Europe initiative
This initiative supports large-scale technological capacity-building and innovation, mobilising €43 billion in public and private investments, with €3.3 billion from the EU budget.
Security of supply and resilience
This act aims to attract increased investments and ensure a reliable supply chain for semiconductor production. A €2 billion chips fund will facilitate access to finance for start-ups.
Monitoring and crisis response system
This system makes it possible to anticipate shortages and coordinate responses during crises, allowing the EU to react swiftly to disruptions.
The EU chips act represents a vital step towards ensuring the region’s competitiveness in the global semiconductor market while also securing Europe's technological future.
The global market
Global semiconductor sales hit $627.6 billion in 2024, an increase of 19.1% compared to the 2023 total of $526.8 billion.
Global market share of semiconductors
In 2023, the EU’s market share of semiconductors represented 12.7% of the global market.
Global market share of semiconductors (2023):
- United States 50.2%
- European Union 12.7%
- Republic of Korea 13.8%
- Japan 9%
- Taiwan 7%
- China 7.2%
Global demand for semiconductors is projected to be worth around €1.4 trillion in 2030, up from $600 billion in 2021.
In 2023, of the $30-billion global market for production of semiconductor devices, EU suppliers represented:
- 8% for production of semiconductor devices
- 28% at equipment level (machines that physically manufacture the chips)
EU-owned companies represent a significant share of the input suppliers for the production of semiconductors.
Semiconductor value chain revenues
The EU27 semiconductor value chain market share in 2022 was €90 billion. Estimates expect it to grow to €149 billion in 2030.
Bar chart showing the historical observed values from 2019 to 2022 and the forecast values from 2023 up to 2030.
Last review: 14 April 2025