Semiconductors are the tiny chips driving our modern world, from smartphones and AI to electric vehicles and renewable energy. Over the past six months (March to September 2025), the UK and EU have been racing to strengthen their roles in this critical industry, spurred by global competition and the need for secure supply chains. For businesses, researchers, and everyday tech users, these efforts are reshaping how we innovate and stay connected. Here’s a look at the key moves, challenges, and what’s next, grounded in the latest developments.
The UK is making bold strides to become a semiconductor hub, with a focus on nurturing talent and innovation. For startups, programs like the ChipStart initiative are opening doors. In March 2025, its third cohort welcomed new companies to develop cutting-edge chips, boosting economic growth. Picture a small firm crafting chips for smarter wearables—that’s the kind of innovation the UK is banking on.
The National Semiconductor Strategy has gained momentum, with TechUK leading discussions on blending AI and manufacturing to drive progress. Events have been pivotal: the NMI Conference in March, a major UK gathering, explored trends like AI-driven chip design and sustainable production, while Hardware Pioneers Max in June sparked startup collaborations to advance the strategy. September’s Energy Conversion Congress & Expo Europe highlighted chips for energy efficiency. According to market forecasts, the UK’s semiconductor sector could grow at around 7% annually, reaching around USD 25 billion by 2034, though experts stress the need for bolder steps to compete globally. Collaborations, like the Global Business Innovation Programme with Taiwan, are strengthening ties, but foreign investments, such as the acquisition of Plessey Semiconductors by Haylo Ventures, raise questions about supply chain security.
The EU is doubling down on its European Chips Act, aiming to capture 20% of the global chip market by 2030. For Europe’s economy, this is about reducing reliance on Asia and the US. In March 2025, nine member states—Austria, Belgium, Finland, France, Germany, Italy, Poland, Spain, and the Netherlands—formed the Semiconductor Coalition to pioneer new technologies and build robust supply chains. By summer, countries pushed for faster chipmaking progress with fresh proposals.
Investment is a priority. In May, SEMI urged the EU to quadruple chip spending to stay competitive. TSMC’s MACHT-AI initiative in Munich is training talent for AI chips, while STMicroelectronics acquired part of NXP Semiconductors’ sensor business for around USD 950 million in July, signalling consolidation. A European Court of Auditors report praised progress but called the Chips Act a patchwork needing sharper focus. Sustainability is also key, with greener chip production a priority to support Europe’s digital goals. SEMICON Europa 2025 (18–21 November in Munich), Europe’s largest electronics manufacturing event, will showcase these efforts, highlighting partnerships for economic resilience.
The global chip race is heating up, and trade dynamics are critical. For manufacturers, the EU-US trade deal caps semiconductor export tariffs at 15%, covering 70% of EU exports and lowering car tariffs from 27.5% to 15%, though steel tariffs remain at 50%. This eases tensions but doesn’t eliminate them. The Germany-Canada partnership on minerals like germanium and gallium secures chipmaking resources. For tech giants, 2025 forecasts predict a chip sales surge driven by AI and data centres, though PC and mobile markets lag. Reported plans for investments like OpenAI’s large-scale Norwegian data centre show Europe’s growing role in AI infrastructure.
The UK and EU have laid strong foundations, with billions invested and collaborations flourishing. But challenges like long factory build times and global competition loom large. For startups, researchers, and policymakers, the next steps will shape how these regions thrive in a world where chips power everything. The race is on, and the stakes couldn’t be higher.
Sources: Compiled from reports by the European Commission, TechUK, SEMI, European Court of Auditors, and industry insights (March–September 2025).
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