The European Union has announced a €525 million investment in European startups that design microchips, aiming to develop the domestic industry and reduce dependence on manufacturers outside Europe.
On Wednesday, the European Commission unveiled the European Chip Design Platform, which will give young companies access to microchip design tools, intellectual property and manufacturing capacity. Grants under the program could reach €16 million.
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The initiative is part of the European Chips Act and will focus primarily on early-stage startups and small and medium-sized enterprises that face high costs in turning ideas into market-ready products.
Design is one of the most important stages in the semiconductor supply chain, where much technological innovation takes place. Yet European companies currently account for less than 1% of global revenue in this segment.
According to foreign media reports, the program aims to create a new generation of competitive European companies in an industry where the continent’s presence remains very limited.
The European Commission sees this weakness as an obstacle to the EU’s broader microchip strategy. European officials argue that building new manufacturing capacity cannot be sustainable without sufficient demand, which must also come from European companies that design chips.
“The European Design Platform gives startups and small and medium-sized enterprises the support they need to overcome barriers and turn their innovative ideas into microchips,” said Henna Virkkunen, the European Commission’s executive vice-president for Technological Sovereignty, Security and Democracy.
Virkkunen said Europe is trying to turn its technological sovereignty goals into concrete steps, not only through policies and promises but also by investing in the industry’s development.
Europe’s position in the global microchip market has weakened for years. Through the European Chips Act, the EU aims to account for 20% of global semiconductor production by 2030, up from about 9% in 2020.
The European Court of Auditors, however, assessed in a report published in 2025 that this target is very unlikely to be met.
The global microchip industry continues to be dominated by a limited number of companies and countries. Taiwan-based TSMC currently makes about seven out of every 10 microchips produced for other companies.
The most advanced microchips, used in artificial intelligence systems and the latest-generation smartphones, are made almost entirely in Taiwan and South Korea. For this reason, the US, Europe and Japan are working to expand their capacity to reduce dependence on these markets.
Supporters of the European Chips Act say it has helped lay a new foundation for reviving the sector after two decades of decline in Europe’s industry.
Unlike efforts focused solely on building factories, the new platform aims to strengthen the design stage. Through it, the EU seeks to create demand and expertise within Europe.
Overall, the strategy aims to strengthen Europe’s semiconductor ecosystem, make supply chains more resilient to crises and limit technological dependence on other countries.
