A Silicon Schengen? Europe Charts New Way Forward as Old Chips Plan Hits Brick Wall

When the European Union unveiled its landmark Chips Act in 2023, the goal was ambitious: To double the bloc's share of global semiconductor production to 20 percent by 2030.

- Lin Suling

It was the continent's North Star, one that many hoped would catalyze efforts to build a more resilient and self-sufficient chips ecosystem.

But two years on, as competition for chip manufacturing heats up, Europe's path remains anything but smooth.

While construction of Taiwan Semiconductor Manufacturing Co.'s (TSMC) first European facility began in Germany's Dresden in 2024, plans by Intel to open a major €30 billion (S$44 billion) fab in Germany's Magdeburg, along with a smaller supporting one in Poland, were postponed. The delay—due to the company's financial difficulties, high energy prices in Germany, and a shortage of skilled local workers—seemed a bad omen.

Today, Europe's chips plan looks unlikely to achieve its target, the European Commission—the EU's executive body—has conceded. The EU is projected to reach just 11.7 percent by 2030, anchored still by the handful of European chipmakers like STMicroelectronics, Infineon, and GlobalFoundries.

So, rather than bank on mega-projects to revitalize chipmaking in Europe, EU members are testing new ways to gain a bigger share of the semiconductor boom. But that requires countries striking different paths.

THE NETHERLANDS TO BOOST CHIPS MADE BY EUROPE

Leading EU countries, restless for progress, are charting a new way to regain ground.

Speaking recently in Singapore, Dutch Economic Affairs Minister Dirk Beljaarts offered The Straits Times a glimpse into what some might call a Silicon Schengen—a new chips coalition launched in March that he said could be expanded from the nine announced at that time to "14 or 15" like-minded member states.