January 6, 2025 /SemiMedia/ — The German Electrical and Electronic Manufacturers' Association (ZVEI) has warned that while subsidies for chip production have shown positive results, more robust support is essential for Europe to remain competitive in the global market.

According to a report co-authored by ZVEI and consultancy Strategy&, the current level of support is insufficient to enable the EU to achieve its goal of capturing 20% of global chip production capacity by 2030. The report projects that Europe’s share of global chip production could decline from 8.1% to 5.9% as other regions outpace Europe with stronger investments.

“Europe risks further losing its production capacity and becoming a pawn in the interests of geopolitical powers,” cautioned ZVEI President Gunther Kegel.

The report, authored by Tanjeff Schadt, highlighted the strong financial returns of investments in microelectronics, which could pay off within 9 to 12 years. Current investment plans are expected to generate €33 billion in additional annual value for Europe, €7.9 billion in extra tax revenues, and create 65,000 new jobs, including 49,000 in Germany. Furthermore, every direct job in the sector is estimated to create six additional jobs along the value chain.

“These figures clearly demonstrate that investments yield significant returns and lay the groundwork for Europe’s competitiveness and innovation capacity,” Schadt emphasized.

Kegel underlined that the current funding commitments are only a starting point and must be expanded to cover a broader microelectronics ecosystem. He also noted that the EU's share of the global printed circuit board (PCB) and electronics manufacturing market remains below 5%, with 85% to 90% of global production concentrated in mainland China and Taiwan. This imbalance, he stressed, demands urgent action.