The EU Wants to Double Its Global Chip Market Share by 2030

Europe’s powers that be have an issue. To simplify it greatly, the continent runs on technology built elsewhere. Brussels wants to change that even more than it wanted to be done with Brexit.

“Not all those who wander are lost”

This J.R.R. Tolkien quote concerns fellowships and rings, but we’re using it in service of the “Digital Compass.” That's the name of a provision in the EU's $2 trillion pandemic recovery package, which earmarks $150 billion to help the EU find its technological way. Europe’s plan has four key planks:

1. Train a more technical workforce. Self-explanatory.
2. Build “secure and substantial” domestic digital infrastructure. Think cloud and AI.
3. Drive “digital transformation” of businesses. This is government/Fortune 500-speak for ditching dinosaur databases and upgrading tech stacks.
4. Digitize government. In this department, Estonia is goalz.

Where’s the compass pointed? The EU wants more digital sovereignty and less dependency on others for key technologies. An example of dependence: As of last March, every top EU bank was primarily using American cloud services.

So what does progress look like?

The EU aims to double its global market share of cutting-edge chip production, with the goal of 20% by 2030. One ace the EU does have in its pocket is Dutch semi equipment supplier ASML, which we’ll tell you more about soon. 👀

Semiconductors provide a good window into continental pushes for domestic talent, industry, and infrastructure.

Opening that window: It’s not just the EU sweating about semis. China is spending tens of billions to establish chip self-sufficiency. Biden recently ordered a review of the US’ critical supply chains. As a result, you’ll likely see Washington pour billions into subsidizing state-of-the-art US chip fabs (from TSMC or Intel).

Zoom out: Believe it or not, Uncle Sam did help sow the seeds of today’s Silicon Valley in the twentieth century. That doesn’t mean top-down industrial policy alone can magically produce a dynamic innovation ecosystem in the EU. It's a start, but the recipe is complicated.