Quo vadis digital sovereignty: The German chip industry between awakening and dependence

Last week at SEMICON Europe impressively demonstrated that the German and European semiconductor industry is currently caught between the poles of departure and dependency. The European chip law was undoubtedly an important first step. At the same time, however, industry associations and companies are making it clear that we need a “Chips Act 2.0” – with less bureaucracy, accelerated approval procedures, more financial resources for pilot lines and a stronger anchoring of design and advanced packaging expertise in Europe. In fact, a large part of value creation, particularly for high-performance chips for AI, cloud and data centers, still takes place outside of Europe. This means that a significant part of the strategic control power remains outside the EU.

Parallel to this, the Digital Sovereignty Summit in Berlin addressed these structural dependencies. The digital turnaround, which was heralded in 2022 with the Chips Act – “There is no digital without chips” – is currently threatening to lose focus in discussions and measures. At the summit, Chancellor Merz and President Macron demonstrated Europe’s political solidarity and emphasized the need to become capable of acting along the entire value chain. However, representatives of the chip industry were remarkably absent from these debates.

Digital Minister Karsten Wildberger put it in a nutshell when he called on politicians and industry to switch from being passive spectators to active shapers – “Hands on the keyboard!” For German industry, this means that investments in AI and cloud data centers must be implemented more quickly and closely dovetailed with European standards for digital identity, open infrastructures and security requirements. The example of Lidl and Schwarz is a positive lighthouse project here – the eleven billion euro investment in the data center in Lübbenau is a strong signal. However, sovereignty reaches its limits when it comes to hardware, as there is currently not only a lack of production capacity at EU level, but also a lack of a competitive design for the required chips.

Now more than ever, policymakers need to reduce bureaucratic hurdles, make funding permanent and create favorable framework conditions that help European technology approaches to become internationally competitive.

Our key recommendations for the Chips Act 2.0

As the Silicon Saxony association, we have submitted five key recommendations as part of the current consultation on the EU Chips Act, which we believe are essential for the successful further development of the law:

1. Tighter integration between Pillar 1 (research and development) and Pillar 2 (industrial manufacturing) is essential. Only a functioning industrial utilization in Europe enables a sustainable return on investment in research and development.
2. The design of industrial projects must become more flexible. Framework conditions change quickly and policymakers must be able to react more agilely to avoid blocking projects.
3. The state should play an active role as a major consumer of IT products, including semiconductors for a wide range of applications from small nodes to AI chips. While China and the US are already establishing standard processes here, the EU as a whole must follow suit – European cooperation is the key to success here.
4. In the area of governance, we are calling for more transparency, especially in bodies such as the European Semiconductor Board. Involving industrial clusters in these structures is essential for acceptance and effectiveness.
5. Despite all efforts, critical dependencies will remain in the short and medium term. Strategic coordination with other regions of the world is therefore necessary in order to potentially close supply gaps – for example in memory chips or base materials for semiconductor production.

SEMICON Europe and the Digital Sovereignty Summit have clearly demonstrated this to us: Europe needs an industrial turnaround now. Political statements are important, but concrete measures that make Europe’s digital sovereignty practicable and economically viable are crucial. The “Chips Act 2.0” must not only lay the foundations for this, but also guarantee innovative strength and investment security in order to mitigate dependencies on global technology giants and achieve new levels of value creation.

On the way there, existing initiatives such as the planned AI Gigafactories should be used more with regard to the scaling of European players, as Spinncloud rightly pointed out at a recent event in Brussels.

If politics, business and research work together now to seize the momentum, the European and therefore also the German chip industry can become the driving force behind Europe’s sovereign digital future and make the transition from laggard to co-creator.

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Further links

🎧 Review SEMICON Europe 2025 (podcast to listen to online)

👉 SpiNNcloud: SpiNNcloud: Europe already has the technology to build AI gigafactories

👉 Tagesschau: Europe wants to go its own digital way

👉 Time: The digital turn of an era

👉 heise: Sovereignty summit: Merz and Macron rehearse closing ranks