EU Chip Industry Faces Bleak Future

A new report by the European Union's Institute for Security Studies and French think-tank Institut Montaigne warns that the European Union's semiconductor industry faces a 'bleak future'. The report, released on July 2, highlights major threats including China's export controls on critical minerals and magnets, the risk of conflict in the Taiwan Strait, and the European Union's growing dependence on United States technology. Co-author Joris Teer noted that dependence on Washington has become a greater concern under the second Trump administration. The United States Congress is also debating a law that could allow unilateral export controls on allied nations. The International — European Commission is attempting to address these issues with its Chips Act 2.0 proposal and by joining the United States-led 'Pax Silica' initiative. The report also points to internal weaknesses such as high energy prices, lack of private capital, and declining chip-consuming industries within Europe.