Europe Shifts Strategy as Chips Act 2.0 Targets Technological “Indispensability”

Brussels moves away from the illusion of semiconductor self-sufficiency

BRUSSELS — The European Commission is preparing to unveil the long-awaited Chips Act 2.0 on 27 May as part of its broader European Tech Sovereignty Package, marking a major strategic shift in Europe’s semiconductor ambitions.

Where the original 2022 Chips Act focused heavily on attracting massive chip factories to European soil through aggressive subsidies, the new proposal appears to move in a different direction: making Europe technologically indispensable rather than fully self-sufficient.

The shift follows several difficult years for Europe’s semiconductor ambitions. The cancellation of Intel’s planned mega-fab in Magdeburg exposed the limits of Europe’s ability to compete directly with the manufacturing scale of the United States and East Asia. At the same time, policymakers increasingly recognized that Europe’s real industrial strengths lie elsewhere — in semiconductor equipment, advanced materials, industrial systems, photonics and automotive technologies.

Instead of trying to dominate every layer of the global semiconductor chain, Brussels is now increasingly focused on controlling the critical technologies the rest of the world cannot easily replace.

Economic Europe — Can Unequal Economies Sustain One Shared Future?

Exploring inequality, infrastructure and the economic foundations beneath European cohesion

Europe shares a market, a currency and increasingly interconnected infrastructures. Capital moves across borders in seconds. Energy networks stretch across the continent. Industrial supply chains connect ports, factories and logistics corridors from Rotterdam to Northern Italy and from Southern Germany to Poland.

Yet beneath this growing integration remains a more uncomfortable reality: Europeans do not experience the economy in the same way.

For some regions, Europe represents mobility, investment and economic opportunity. For others, it increasingly feels associated with rising housing costs, demographic decline, labour migration and the gradual concentration of wealth and talent inside a limited number of successful metropolitan regions.

This tension may become one of the defining questions of Europe’s future.

Because the European project was never only about markets or regulations. It was also about cohesion — the belief that economic integration could gradually create greater stability, prosperity and interconnectedness across the continent.

But integration does not automatically produce balance.

Europe Needs a New Architecture

China Plans. America Scales. What Does Europe Build?

For decades, Europe believed infrastructure had become invisible. The systems beneath society — energy grids, telecom networks, payment rails, logistics chains and computing infrastructure — were increasingly treated as technical layers that simply existed in the background. Citizens interacted with interfaces, not with the architectures beneath them. Convenience replaced awareness.

But the digital age has slowly exposed a different reality. Infrastructure was never neutral. It quietly became the operating system of economic power, political sovereignty and social organisation. The cloud determines where data flows. Payment systems determine how economies function. Algorithms shape visibility, behaviour and access. Undersea cables, hyperscale data centres and semiconductor supply chains now influence geopolitics as much as armies or natural resources once did.

The world is no longer organised around applications alone. It is increasingly organised around the infrastructures that determine what applications, markets and societies are allowed to become.

“Innovation is not just about the rate of change, but also its direction. Europe needs to stop being a ‘market fixer’ and start being a ‘market shaper.’ Infrastructure is the tool through which a society expresses its long-term purpose.”

Mariana Mazzucato, Professor of the Economics of Innovation and Public Value at University College London (UCL), in The Entrepreneurial State: Debunking Public vs. Private Sector Myths.

That shift is forcing countries and continents to answer a difficult question: who still possesses the ability to build long-term societal direction in the digital age?