Europe is betting €525 million on chip design start-ups

The European Commission has announced a €525 million investment in start-ups specializing in chip design, aiming to foster a new generation of European companies in this field. The European Chip Design Platform, introduced on Wednesday, offers these firms access to design tools, intellectual property, and manufacturing resources, along with grants of up to €16 million.

Chip design constitutes a crucial stage within the semiconductor value chain, where much of the industry's innovation originates. Currently, European firms account for less than 1% of global revenues in this segment, according to the Commission. EU officials argue that this deficiency undermines the broader chip strategy of the bloc, as sustainable new manufacturing capacity in Europe necessitates sufficient demand, which largely depends on European designers.

The stakes extend beyond start-ups, as European factories can only prove profitable if European designers can meet the demand. Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security, and Democracy at the European Commission, emphasized that the European Design Platform provides support to European chip start-ups and SMEs, enabling them to transform their innovative ideas into silicon products.

This platform exemplifies Europe's commitment to achieving technological sovereignty goals, not solely through policy and promises but also through substantial investments in its future. Europe's standing in the global chip industry has faced challenges for several years. The Chips Act, designed to elevate the EU's share of global semiconductor production to 20% by 2030, currently stands at around 9% in 2020.

A 2025 report by the European Court of Auditors concluded that achieving this target is highly unlikely. Chip capacity is dominated by a few companies, with Taiwan Semiconductor Manufacturing Company (TSMC) producing approximately seven out of every ten chips for other firms. Advanced chips, crucial for AI and the latest smartphones, are predominantly manufactured in Taiwan and South Korea.

The United States, Europe, and Japan are all striving to establish their own capacity to lessen their dependence on these nations. Advocates of the Chips Act contend that it has successfully reversed a prolonged decline, laying a robust groundwork to propel Europe towards growth following two decades of stagnation. The design platform complements the EU Chips Act, which encompasses five strategic objectives, including bolstering Europe's design capacity in advanced chips, enhancing the resilience of supply chains, and diminishing external dependencies.