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A European Niche Strategy in the Global Chips War

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  • Daniel Gros

Abstract

Key Messages:The semiconductor industry comprises two distinct sectors: advanced chips for smartphones or data centers and less advanced ones for carsWhile political and media attention focuses on advanced chips, European industry does not use themNVIDIA and TSMC dominate the supply of the most advanced chips, but EU firm ASML is the sole supplier of the machinery needed for these chipsThe EU Chips Act finances legacy node chips, which are needed by the European industry but represent a medium-tech sector with low profit marginsThe EU should focus its support on its comparative advantage – machines for chip production – rather than on capital-intensive fabs for legacy chips

Suggested Citation

  • Daniel Gros, 2026. "A European Niche Strategy in the Global Chips War," EconPol Forum, CESifo, vol. 27(01), pages 21-27, January.
    • Handle: RePEc:ces:epofor:v:27:y:2026:i:01:p:21-27
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    File URL: https://www.ifo.de/DocDL/econpol-forum-1-2026-gros-niche-strategy.pdf
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    References listed on IDEAS

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    1. ROSATI Nicoletta & BONNET Paolo & CIANI Andrea & DUCH BROWN Nestor & MIGUEZ Sebastián & ZAURINO Elena, 2023. "The EC consultation on the semiconductors’ value chain," JRC Research Reports JRC133892, Joint Research Centre.
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