Europe Chips Act 2.0 Bets on Power, Auto Chips

The European Union’s Chips Act 2.0 strategy is shifting away from chasing leading-edge foundry capacity and instead doubling down on areas where Europe already leads: semiconductor equipment, power electronics, and automotive/industrial chips. Analysts say the move makes Europe harder to bypass in critical supply chain niches, even if it cannot match TSMC or Samsung on advanced nodes.

Europe’s competitive advantages lie in semiconductor equipment (ASML) and power semiconductor leaders like Infineon, STMicroelectronics, and NXP. Chips Act 2.0 prioritizes mature-node manufacturing, wide bandgap devices (SiC and GaN), and automotive-grade chips—segments that require specialized PCB and substrate technologies. For PCB/PCBA buyers, this means growing demand for heavy copper boards, insulated metal substrates (IMS), and ceramic substrates that handle high voltages and thermal stress in EV inverters, industrial motor drives, and power modules. Europe’s focus on analog and mixed-signal ICs also drives need for high layer count PCBs with controlled impedance.

The strategy does not attempt to replicate TSMC or Samsung’s leading-edge logic capacity, but it aims to reduce dependency in critical sectors. Europe remains reliant on Asia for advanced chips, yet the focus on power, automotive, and industrial electronics strengthens resilience for OEMs sourcing in the region. For PCB assemblers and substrate suppliers, the shift signals more localized production and tighter collaboration with European fabs. Analysts note that advanced packaging and substrate-like PCBs remain a gap, but Chips Act 2.0 may fund pilot lines for chiplets and heterogeneous integration, creating new opportunities for high-density interconnect (HDI) and IC substrate suppliers.

As Europe doubles down on power electronics and automotive semiconductors, LT CIRCUIT’s heavy copper, IMS, and ceramic PCB offerings align with the thermal and reliability demands of EV inverters, industrial drives, and wide bandgap modules. The Chips Act 2.0 focus on localized supply chains also creates potential for closer partnerships with European OEMs and fabs.