Europe’s semiconductor strategy is shifting from chasing manufacturing scale to owning the ecosystem layer—chiplets, interoperability, and heterogeneous integration—as AI drives compute complexity beyond monolithic limits.
Strategic pivot from fabs to ecosystems
Despite the European Chips Act’s investment push, the continent’s global semiconductor market share could fall to roughly 6% this year, according to industry veteran Maria Marced. The emerging focus of Chips Act 2.0, she notes, is on end-to-end ecosystems spanning chips through final products, rather than replicating Asian manufacturing scale.
This pivot reflects a structural industry transformation. AI, autonomous systems, and edge computing demand modular architectures built from multiple chiplets linked via advanced packaging and high-speed interfaces. For Europe, this creates an opportunity to compete on coordination, standards, and system-level integration rather than fabrication volume.
Automotive drives chiplet adoption
Imec’s Automotive Chiplet Program, now expanding into a broader Autonomous Edge Chiplet Program, illustrates the shift. Autonomous vehicles require leading-edge compute, but automotive volumes are too low to justify fully custom monolithic designs at advanced nodes, explains portfolio manager Peter Vandersteegen.
Chiplets offer a solution by enabling modular, reusable building blocks integrated through advanced packaging. This economic logic extends beyond automotive to robotics, industrial automation, and other AI-driven systems with limited initial deployment volumes. Imec’s focus has accordingly broadened from automotive-specific chiplets to general ecosystem infrastructure.
Interoperability as the critical layer
Chiplet ecosystems only function at scale when components from multiple vendors interoperate reliably. This demands global standards for interfaces, thermal stress validation, compliance testing, and multi-vendor reliability—areas where imec is investing through a new prototyping and compliance site in Heilbronn, Germany.
The shift mirrors earlier platform transitions in computing and telecom, where ecosystem control and standards became as strategic as the hardware itself. Europe’s strength in automotive safety, long lifecycles, and complex supply chains positions it to lead this interoperability layer.
Europe’s post-fab competitive advantage
Marced argues that Europe’s future competitiveness depends not on matching Asia’s fab scale, but on dominating design, integration, and heterogeneous computing ecosystems. “Instead of building fabs, it’s about focusing on design,” she says. Manufacturing investments from Intel, TSMC, and others continue, but industry leaders acknowledge that scale alone cannot restore leadership.
The chiplet transition aligns with Europe’s industrial DNA: safety-critical systems, multi-vendor supply chains, and long product lifecycles. By becoming indispensable in the infrastructure layer—advanced packaging, chiplet interoperability, and automotive integration—Europe can secure a strategic role in the next era of semiconductor architecture.
