Global Interconnectedness: A Vision for 2030

Dr Luigi Capoani and Alberto Corso of the European Youth Think Tank (EYTT) discuss Europe’s semiconductor industry

Europe’s semiconductor industry has seen significant changes over the years. In 2010, Europe produced 13% of the world’s chips, but by 2030, this is forecasted to decrease to 8%. The production of semiconductors involves various stages, each requiring specialized expertise, from research to testing. These complex supply networks have created deep dependencies across regions, revealing vulnerabilities in the global economy.

Challenges in the Semiconductor Industry

As governments recognize the strategic importance of chips in various sectors like AI, digital infrastructure, and defense, there has been a push to build domestic capacity and reduce reliance on foreign suppliers. However, the semiconductor supply chain is highly concentrated, with six regions accounting for over 90% of the world’s chipmaking capacity.

Europe’s role in the global semiconductor value chain depends on various factors. While the EU has set ambitious goals to increase its chip production, significant challenges lie ahead, including the lack of advanced chip production facilities within the region. Additionally, designing chips without the capacity to manufacture them domestically poses challenges for European companies.

Recent Policy Developments

To address these challenges, the European Union is introducing new legislation, such as the Chips Act 2.0, aimed at supporting strategic industrial production, particularly in AI-related components. The EU has already approved measures to support the establishment of new chip manufacturing plants, such as the European Semiconductor Manufacturing Company (ESMC) in Dresden.

Future of Europe’s Chip Industry

Despite these efforts, Europe faces constraints that could impact its chip industry’s future. Challenges include a shrinking semiconductor workforce, dependence on external sources for crucial materials like gallium, and the balance between self-sufficiency and innovation. Europe’s path forward in the semiconductor industry will require strategic planning and collaboration with global partners.

When considering the semiconductor supply chain, one must ask who has the most influence and the potential impact if their involvement were to cease abruptly.

References

1. Boston Consulting Group & Semiconductor Industry Association. (2024). Exploring the emerging resilience within the semiconductor supply chain. https://www.bcg.com/publications/2024/exploring-emerging-resilience-semiconductor-supply-chain
2. DECISION Études & Conseil. (2025). Insights from the ECSA skills strategy report 2025. European Chips Skills Academy. https://chipsacademy.eu/news/ecsa-skills-strategy-2025/
3. European Commission. (2024, August 20). Approval of €5 billion German State aid to bolster ESMC in establishing a new semiconductor manufacturing facility [Press release]. https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4287
4. European Commission. (2026a). Enhancements in the Chips Act 2.0. https://digital-strategy.ec.europa.eu/en/policies/chips-act-2
5. European Commission. (2026b). Overview of the European Chips Act. https://digital-strategy.ec.europa.eu/en/policies/european-chips-act
6. European Court of Auditors. (2025). Evaluation of the EU’s strategy for microchips. Publications Office of the European Union. https://www.eca.europa.eu/en/publications/SR-2025-12
7. Poitiers, N., & Weil, P. (2021). Redefining the European Union’s semiconductor strategy (Policy Contribution No. 17/2021). https://www.bruegel.org/policy-brief/redefining-european-unions-semiconductor-strategy
8. U.S. Geological Survey. (2026). Gallium. In Highlights from the Mineral Commodity Summaries 2026 (pp. 82–83). https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-gallium.pdf

About the authors

Luigi Capoani is a respected economist, researcher, and educator specializing in International Economics at Ca’ Foscari University of Venice. His academic background includes a doctoral degree in Economics from the University of Salerno, with research conducted at the University of Birmingham. His scholarly pursuits revolve around international economics, industrial policy, technological innovation, and regional development.

Alberto Corso serves as an analyst at the European Youth Think Tank. His areas of expertise encompass technological advancements, geopolitical affairs, migration trends and their impact on labor markets, and global trade policies like tariffs and protectionism.