Europe wants to make its own chips again. The price tag: north of €120 billion in announced investments, a figure that would have seemed fantastical just a few years ago when the continent was content to let Asia handle the silicon.

From €43 billion target to €120 billion in commitments

The foundation for all of this was the European Chips Act, adopted in July 2023 and effective that September. The original ambition was already bold: mobilize €43 billion in public-private investment to double the EU’s share of global semiconductor production from roughly 10% to 20% by 2030.

That target got blown past faster than anyone expected. By May 2026, investment commitments had exceeded €80 billion, nearly double the original goal. At their peak in 2025, total announced investments crossed the €120 billion threshold before some notable cancellations brought the trajectory back to earth.

The European Commission has approved seven state aid decisions totaling over €31.5 billion for innovative semiconductor facilities.

The pandemic-era chip shortage, which crippled European automakers and industrial manufacturers alike, made the vulnerability impossible to ignore.

Intel’s €30 billion ghost factory

Intel had committed to building a €30 billion manufacturing facility in Magdeburg, Germany. It was supposed to be a cornerstone of Europe’s semiconductor renaissance. Intel scrapped the project despite having been offered €10 billion in public aid to make it happen.

Chips Act II and the AI pivot

A sequel is in the works. The so-called Chips Act II is expected to launch as a formal proposal in late May 2026. The key change: it would grant the EU Commission direct funding capabilities for manufacturing, rather than relying solely on member states to channel support.

The second act also pivots toward artificial intelligence technologies. AI workloads are the fastest-growing source of chip demand globally, and Europe doesn’t want to find itself dependent on foreign silicon for the next computing paradigm the way it was dependent on foreign chips for cars and smartphones.

What this means for investors

The investment case here splits into two timelines. In the near term, European semiconductor equipment makers, materials suppliers, and construction firms tied to fab buildouts stand to benefit from the capital flowing into new facilities. The €80 billion-plus in commitments already on the books translates into real procurement contracts and real revenue for companies in those supply chains.

Intel’s cancellation demonstrates that announced investments and completed factories are very different things. Investors should watch the gap between commitments and actual operational capacity closely. A €120 billion announcement pipeline means less if significant chunks of it follow Intel’s Magdeburg facility into the graveyard of cancelled megaprojects.

If the Chips Act II successfully centralizes funding authority at the Commission level, it could accelerate decision-making and reduce the political haggling that slows down member-state-driven subsidy programs, affecting whether the 20% market share target by 2030 is achievable.