Silicon Sovereignty: Can Europe Build Its Own Advanced Chips?

Modern life runs on semiconductors — cars, phones, wind turbines, medical devices, and every military system now depends on chips that Europe, for the most part, does not make itself. The most advanced logic chips, the ones powering AI systems and cutting-edge computing, are produced almost entirely by a handful of facilities in Taiwan, with South Korea and the United States close behind. Europe retains real strengths in specific niches — the Netherlands’ ASML makes the lithography machines the entire industry depends on, and Germany and France have solid positions in automotive and power semiconductors — but in the most advanced process nodes, Europe is essentially a customer, not a producer. Closing that gap is one of the most technically demanding items on the self-reliance agenda, because chip fabrication is arguably the single most complex manufacturing process humans have ever industrialized.

A Major Expansion of the Chip Industry

The European Chips Act, adopted in 2023, set out to mobilize tens of billions of euros in public and private investment with the aim of doubling Europe’s share of global chip production by 2030. That target has drawn skepticism from industry analysts, given how far behind Europe starts and how quickly Taiwan, South Korea, and the U.S. are simultaneously expanding their own capacity with even larger subsidy packages. Ambitious targets are still useful as organizing goals, but Europe’s expansion has to be realistic about where it can plausibly compete — likely not at the very leading edge against TSMC, but in specialized, high-value segments like automotive chips, power electronics, and mature-node production where reliability and specialization matter as much as raw transistor density.

Building More Fabs

Fabrication plants are the physical heart of chip production, and Europe has already begun attracting them: Intel’s planned facility in Magdeburg, Germany, TSMC’s joint venture fab in Dresden, and STMicroelectronics’ expansions in France and Italy all represent steps toward on-continent production capacity. Each of these projects, though, has come with enormous public subsidy — Intel’s Magdeburg plant alone was offered several billion euros in German state support — raising the question of how much this expansion can scale before subsidy costs become politically or fiscally unsustainable.

Fabs also take years to plan, build, and bring to full production, and some announced projects have already faced delays or scaled-back ambitions as market conditions shifted. A sober expansion strategy plans for a marathon rather than a rush: securing the specialized engineering talent, reliable power and water supply, and long lead-time equipment (much of it, ironically, from ASML in the Netherlands) that fabs require, rather than treating groundbreaking ceremonies as the finish line.

Strengthening European Chip Design

Fabrication is only half the picture — someone has to design the chips being fabricated, and this is an area where Europe has a genuinely strong but underappreciated asset: the UK’s Arm designs the architecture underlying the vast majority of the world’s mobile processors, and companies across the continent contribute design tools, intellectual property, and specialized chip architectures for automotive and industrial applications.

Growing this further means investing in the university research pipelines, design software ecosystems, and startup funding that let chip design companies emerge and scale in Europe rather than being acquired by, or relocating to, the U.S. or Asia at the first sign of success — a pattern that has repeatedly drained European tech talent and intellectual property abroad. Design does not require the same enormous capital outlay as fabrication, which makes it a comparatively efficient place for Europe to build strength while the more capital-intensive fab expansion plays out over a longer horizon.

Investing in Next-Generation Chip Technology

Competing on today’s technology alone means permanently chasing Taiwan and South Korea, who are already investing heavily in the process nodes that will define the next decade. Europe’s more promising route may be investing directly in what comes after current silicon technology: quantum computing components, photonic and neuromorphic chips, and novel materials research, areas where no single country yet holds the overwhelming lead that Taiwan holds in conventional lithography.

This is inherently a higher-risk, longer-horizon bet than expanding conventional fab capacity, and public research funding — through initiatives like Horizon Europe and national research institutes — plays a larger role here than private investment alone would support. The payoff, if it works, is entering a technological generation on more equal footing rather than perpetually retrofitting European industry into someone else’s roadmap.

Conclusion

Full semiconductor self-sufficiency, in the sense of Europe never again needing a single imported chip, is not a realistic goal within any reasonable timeframe — even the United States, with vastly larger subsidies, does not aim for that. A more achievable goal is resilience: enough domestic fabrication, design strength, and next-generation research to ensure Europe is never entirely at the mercy of a Taiwan Strait crisis or a hostile export restriction, and can compete meaningfully in the specific niches — automotive, industrial, power electronics, and whatever comes after silicon — where it has the best chance of genuine, sustainable leadership.