EU spreads its chip money; the US put $50bn in one law

The European Commission launched a €525 million platform for chip designers on 4 November. It is the newest strand of EU chip funding, which is spread across research lines and national factory aid, where the United States put $50 billion into one federal fund in 2022.

Executive Vice-President Henna Virkkunen, the commissioner for tech sovereignty, launched the European Chip Design Platform under the EU Chips Act. Europe, she said, is acting "not only through policy and promises, but also by investing in our future".

The new money goes to designers

The Commission's announcement splits the €525 million this way:

• Grants: €440 million of public money from the EU and member states.
• The platform itself: €85 million for cloud infrastructure, support services and open-source design tools.
• Who pays: €285 million comes from the EU budget and €240 million from the states taking part in the Chips Joint Undertaking.
• Start-ups: up to €100,000 each for early proof-of-concept prototypes, and up to €16 million for more developed companies bringing a chip to market.

A consortium led by imec, which has its headquarters in Leuven, runs the platform. The Commission's case rests on demand: European companies "account for less than 1% of global revenues" in chip design, it says, and "new manufacturing capacity in Europe will only be sustainable if there is enough demand for it".

Europe's factories are paid for by national budgets

The EU Chips Act, in force since 21 September 2023, funds chips through separate channels:

• Research: the Chips for Europe Initiative has over €3 billion from two EU programmes, matched by the participating states. Its five pilot lines represent €3.7 billion of EU and national investment. The largest, NanoIC in Leuven, opened in February with €700 million from the EU.
• Factories: member states grant the aid and the Commission approves it. It has approved 19 state aid decisions for first-of-a-kind facilities, covering projects with more than €33 billion of public and private investment. The largest is ESMC in Dresden, at more than €10 billion.

The Commission says the Act has helped to mobilise more than €80 billion in announced or planned investments.

Washington used one federal fund

The CHIPS and Science Act, which became law on 9 August 2022, appropriated $50 billion to the CHIPS for America Fund over fiscal years 2022 to 2026:

• $39 billion for incentives to build or expand chip factories;
• $11 billion for research and development programmes.

It also created a 25% tax credit for investment in advanced manufacturing facilities.

By January 2025 the Commerce Department had funded 19 companies with $30.7 billion in awards and $5.5 billion in loans for 40 factory projects, the Congressional Research Service reported in July.

The American money has a deadline

The same report sets out what is ending:

• Fiscal year 2026, which closed on 30 September, was the last for which the department receives CHIPS Act money for factory incentives.
• The tax credit, now 35%, covers only projects that begin construction before 31 December 2026.
• Twelve more companies signed preliminary agreements for 18 projects. As of June, public records did not show whether any of them had received a final award.

The terms of earlier awards have moved too. Intel gave the government equity in exchange for its direct funding award, and Micron's award grew by $275 million after it announced higher spending on its projects.

Both sides are rewriting the rules

In Washington, the House Energy and Commerce Committee ordered the Chip EQUIP Act (H.R. 6207) reported by 39 votes to 0 on 16 September. Sponsored by Zoe Lofgren (Democrat, California), it would bar companies that receive certain federal funds from buying specified chipmaking equipment made by "foreign entities of concern" for the funded project.

In Brussels, the Commission proposed a "Chips Act 2.0" on 3 June. It would speed up permitting, add an excellence label for semiconductor regions and support investment and strategic projects. The Commission's notes on the 2027 budget agreement, published on 11 November, say the draft budget finances the Chips Act "under Horizon Europe and through redeployment from other programmes".

What to watch

• 31 December 2026: the last day for a US project to begin construction and still claim the 35% credit.
• 30 September 2027: the final $400 million appropriated to the CHIPS for America Defense Fund stops being available.
• The Chip EQUIP Act: its last recorded step is the committee vote of 16 September. The Science, Space, and Technology Committee also holds a referral.

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