The European Commission’s forthcoming Chips Act II proposal must prioritize faster funding and reduced bureaucracy to remain competitive, warns a leading Central European investor.
Regulatory Bottlenecks
The European Chips Act, effective since September 2023, has catalyzed over €80 billion in manufacturing investments. However, Daiva Rakauskaitė, manager at Aneli Capital, argues that the next phase must address systemic fragmentation. “Semiconductor projects operate on short innovation cycles and require major upfront capital,” she notes. “Delays in permitting, fragmented state-aid processes, and high compliance costs directly weaken competitiveness.”
Europe currently holds roughly 10% of the global semiconductor market. The Chips Act aims to double that share to 20% by 2030, a target that aligns with McKinsey’s projection of a $1.6 trillion global chip industry by that year.
Funding Momentum vs. Commercialization Gaps
European semiconductor startups raised a record €972 million in 2025, with Q1 2026 already exceeding €380 million, per PitchBook. Investors are increasingly backing hardware ventures—spanning semiconductors, robotics, and quantum technologies—because they are harder to replicate than software-as-a-service AI solutions.
Yet Rakauskaitė cautions that stronger investor interest does not automatically solve Europe’s main bottleneck: faster pathways to commercialization. A Dealroom Deep Tech report reveals Europe hosts 30% of the world’s top deep tech universities and produces twice as many science and engineering graduates as the US. Despite this, nearly 40% of deep tech unicorns with European founders are based in the US.
The Middle-Stage Challenge
“Many young European deep tech companies face a difficult middle stage between research funding and commercial revenue,” Rakauskaitė explains. Semiconductor startups require expensive prototyping, testing, certification, and customer qualification before scaling. Improving these pathways would strengthen the entire ecosystem.
Series B+ funding remains a critical gap. While Europe is expected to see several €1 billion-plus deep tech funds, systemic changes are needed: more flexible public-private financing, faster state-aid approvals, and stronger pension-fund participation in venture capital.
Forward Outlook
The success of Chips Act II will hinge on whether Europe can convert its scientific density into scaled commercial enterprises. Without decisive action on regulatory speed and capital access, the continent risks ceding its deep tech talent to the US—even as global chip demand surges toward $1.6 trillion. The next proposal must move beyond investment volume to create predictable, commercially viable conditions for startups that bridge research and revenue.
