Semiconductors at the Heart of Europe’s Push for Technological Sovereignty

In recent years, the European Union has undergone a significant shift in recognising the importance of technological sovereignty. Semiconductors, once treated as a background technology, are now at the heart of this new dynamic. This change has been driven by geopolitical tensions, supply chain disruptions, and the realisation that dependence on non-European technologies for semiconductors poses strategic vulnerabilities in critical sectors such as supercomputers, artificial intelligence and datacentres (AI). 

The U.S.-China Semiconductor Standoff

The United States has recently intensified its efforts to curb China’s access to advanced semiconductor technologies. In late 2024, the U.S. Department of Commerce introduced stringent export controls, restricting China’s access to 24 types of chip manufacturing equipment and high-bandwidth memory (HBM) components. These measures aim to prevent China from using advanced chips to build potentially dangerous AI technology.

Major semiconductor companies have felt the impact. Nvidia reported a $5.5 billion charge due to the inability to sell its H20 chips in China, while AMD anticipated an $800 million hit. Dutch chip-making equipment supplier ASML also warned of increased uncertainty for 2025-2026 due to new tariffs.

In response, China has imposed its own restrictions, including a ban on the export of critical minerals like gallium and germanium to the U.S., essential for semiconductor manufacturing. These tit-for-tat measures have disrupted global supply chains and highlighted the strategic importance of semiconductor self-sufficiency. The United States wants to complicate China’s supply of the most advanced chips in order to maintain its technological lead in strategic areas, including the military. While this strategy is likely to hinder China, it does not seem to be enough to halt the growth of its semiconductor industry. Neither of the two giants has all the cards in hand to stop its rival’s drive. In the meantime, the rest of the world is trying to keep up.

Semiconductors and the European response 

Recognising the strategic importance of this industry, and the consequences of a complete loss of sovereignty, the EU introduced the European Chips Act in 2023. This legislative package is designed to strengthen Europe’s semiconductor ecosystem by focusing on research, development, and onshore manufacturing capabilities. The Act seeks to double the EU’s global market share in semiconductors from 10% to 20% by 2030, reducing reliance on foreign suppliers.

Achieving technological sovereignty requires collaborative efforts across EU member states and industries. A coalition of nine EU countries, including Italy, France, Germany, Spain, and the Netherlands, is working to expedite plans to boost the bloc’s chip industry. This alliance aims to present comprehensive proposals by the summer, focusing on targeted funding and strategic initiatives to strengthen Europe’s position in the semiconductor sector. Furthermore, industry groups representing chipmakers and the broader semiconductor supply chain are urging the European Commission to launch a follow-up to the Chips Act. They advocate for a program that decisively supports semiconductor design, manufacturing, research and development, materials, and equipment, emphasising the need for a holistic approach to building a resilient semiconductor ecosystem.

One of the most significant responses to this call is SiPearl, a French company at the forefront of Europe’s processor revolution. As a key member of the European Processor Initiative (EPI), SiPearl is developing Rhea, the world’s first energy-efficient HPC microprocessor designed to work with any third-party accelerator, such as GPUs and AI specialized chips. This innovation is set to power Europe’s exascale supercomputers, addressing major challenges in medical research, artificial intelligence, security, energy management, and climate change mitigation, all while limiting environmental impact.

The firm’s contributions are emblematic of Europe’s broader strategy to foster homegrown technological champions. Philippe Notton, CEO of SiPearl, has highlighted the importance of targeted support for startups within the framework of the Chips Act, stating, “The European Chips Act is a good start. If we manage to mobilise more public funds in the semiconductor sector to get things moving again, as is being done in most countries, that will be a positive thing.” He further emphasised the need for the Act to benefit European companies, cautioning against scenarios where public funds enrich non-European entities. Finally, he stresses the importance of investing in the development of small and medium-sized enterprises, thereby avoiding most public funds being absorbed by large private groups.

ASML Holding NV, a Dutch company specialising in photolithography equipment essential for semiconductor manufacturing, is another firm that exemplifies Europe’s potential to lead in specific segments of the semiconductor supply chain. However, the firm has faced challenges due to export controls and geopolitical tensions, which have impacted customer spending and highlighted the complexities of maintaining technological sovereignty.

ASML’s leadership has voiced concerns over the implications of export restrictions. Christophe Fouquet, ASML’s CEO, emphasised the importance of innovation over restrictive policies, stating, “Our strong advice is: Win by winning. Innovate, invest, create the space for companies to innovate and compete. If you start to only worry about what the other people are doing you are already dead.” He also acknowledged that while export controls might be necessary for national security, they should not be used to stifle competition: “What we need to make sure is that this is being used for the right sake.”

These perspectives underscore the delicate balance between safeguarding national interests and fostering an environment conducive to innovation and collaboration within the global semiconductor industry, but these companies, with a deep European DNA, are key to ensuring EU technological resilience.

EuroHPC and the quest for supercomputing sovereignty

In the realm of high-performance computing (HPC), the European High-Performance Computing Joint Undertaking (EuroHPC JU) plays a pivotal role in advancing Europe’s digital sovereignty. Anders Dam Jensen, Executive Director of EuroHPC JU, has been instrumental in steering initiatives that bolster Europe’s capabilities in supercomputing. He emphasised, “From its inception, one of the core objectives of the JU has been to develop a full European supercomputing supply chain, encompassing processors, software, applications, and know-how.” A significant milestone in this endeavour is the development of JUPITER, Europe’s first exascale supercomputer. Jensen highlighted the strategic importance of this project: “JUPITER sets itself apart as the first European system capable of achieving one exaflop in computing power. With its unprecedented computing capacity, JUPITER is set to achieve a significant milestone for European science and innovation.”The machine is expected to run on European-designed chips—exactly the kind SiPearl is building—even though Nvidia’s technology will be used as well.

This is no coincidence. SiPearl’s microprocessors are being developed explicitly to power such next-generation supercomputers, making it not just a participant in the European sovereignty movement, but a cornerstone of it. Its technology embodies the EU’s ambition: cutting-edge, energy-efficient, and designed in Europe. This sovereignty isn’t about closing doors to the world — it’s about ensuring Europe retains control over the technologies that shape its future, from defence to innovation, from cloud computing to AI, and from climate modelling to energy management.

Artificial Intelligence

Artificial intelligence is the next frontier in this sovereignty quest. The European Commission has proposed raising €200 billion to construct four “AI gigafactories” as part of its strategy to catch up with the U.S. and China in AI development. This initiative follows France’s €109 billion AI investment pledge in February 2025 and €150 billion private sector commitment from major European firms. So, there is plenty of funding to ensure that, as Ursula von der Leyen wishes, “Europe becomes an AI continent“. These large-scale data centres are intended to provide the computational power necessary for advanced AI research and applications. However, experts have raised concerns about the feasibility and sustainability of such projects, highlighting challenges related to chip supply, energy consumption, and the rapidly evolving nature of AI technology. Moreover, gigafactories are only relevant if they meet clearly identified needs. Presently, Europe does not have any giants like the GAFAMs capable of absorbing a significant proportion of the most advanced chips produced in Europe. The continent is therefore facing several issues at the same time, and the construction of gigafactories alone cannot be the answer to these complex and intrinsically interconnected challenges.

Investing in Data Infrastructure and cloud sovereignty

Beyond semiconductors and artificial intelligence, the EU is also focusing on enhancing its data infrastructure. A notable example is the investment in Start Campus, a data centre hub in Sines, Portugal. Backed by U.S. investment fund Davidson Kempner and Britain’s Pioneer Point Partners, the project aims to invest €8.5 billion by 2030 to meet the growing demand from major tech and AI companies. “We expect this campus to represent more than €8.5 billion in construction investment alone – and we anticipate our customers to invest multiples of that in infrastructure and technology deployments on-site,” said Robert Dunn, CEO. This initiative not only boosts Europe’s data processing capabilities but also positions Portugal as a strategic player in the data economy. However, questions of sovereignty must here be thoroughly scrutinised as the project is being financed by an American fund…

Sovereignty means decoupling Europe from financial reliance on foreign entities to sneer greater control and autonomy. The reliance on non-European cloud service providers has raised concerns about data security and control. Roberto Cingolani, CEO of Italian defence and electronics firm Leonardo, emphasised the need for state-controlled cloud services to store sensitive data. He stated, “In my opinion, a safe country needs a government cloud, at least for financial, health and defence data.” This perspective aligns with broader European efforts to develop sovereign cloud solutions that ensure data protection while fostering innovation. Collaborations among European tech players aim to establish a sovereign edge cloud for Europe, balancing sustainability, sovereignty, and the growing demands of the digital economy.

A European moment—if it can be seized

Europe is at a crossroads. Semiconductors are not just another industry. They are the nervous system of the digital age. In recognising their centrality, Europe is finally awakening to the strategic realities of the 21st century. What remains is the will to coordinate these efforts into a coherent, sovereign ecosystem. The path to sovereignty is long—but the first, critical steps must be firm and decisive.