The European Union has launched a €525 million initiative to support semiconductor design startups, seeking to strengthen a segment of the global chip market where European companies hold less than 1% of revenue.
The European Chip Design Platform, unveiled by European Commission technology chief Henna Virkkunen, will provide funding and technical resources to help smaller chip developers bring their products to market. The investment is part of the EU Chips Act, which seeks to expand Europe’s semiconductor industry and reduce its reliance on chip technology and manufacturing based outside the region.
Of the €525 million investment, €440 million is allocated to grants for chip developers, while €85 million will support the design platform. The EU budget will contribute €285 million, with participating European countries providing the remaining €240 million.
Startups developing early prototypes can receive grants of up to €100,000, while more established chip design companies can qualify for as much as €16 million to support commercial development.
Lowering the Cost of Chip Development
A central goal of the initiative is to make semiconductor development more affordable for smaller companies, which lack the deep pockets of established chipmakers.
Through the platform, participating companies will gain cloud-based access to specialized design software, technical assistance and intellectual property blocks. These reusable circuit components allow developers to incorporate existing designs rather than build every element of a chip from scratch.
The platform will also connect chip designers with manufacturing facilities, allowing companies without their own factories to produce their chips.
Belgian semiconductor research organization imec leads the consortium operating the platform. Work began in 2025, and 20 startups are already participating in a program designed to prepare their technologies for commercial markets. The initiative complements other European semiconductor development efforts, including a €40 million German-Dutch program focused on using AI to design AI processors.
The €525 million initiative is designed to help European companies develop competitive chips while building demand for the region’s semiconductor manufacturing industry.
Challenges Ahead
The new funding arrives as the EU struggles to meet its broader semiconductor production goals. Under the Chips Act, Europe established a target of producing 20% of the world’s semiconductors by 2030, compared with approximately 9% in 2020.
However, the European Court of Auditors concluded in a 2025 report that achieving the 20% target is highly unlikely.
Competition is particularly tough in advanced semiconductor manufacturing. TSMC held 73% of the global pure-play semiconductor foundry market in the second quarter of 2026, according to Counterpoint Research. Taiwan and South Korea dominate production of the most advanced chips used in AI systems and smartphones.
Europe’s strategy now places greater emphasis on connecting semiconductor design with manufacturing investment. Building fabrication plants alone won’t establish a competitive chip industry if European companies lack sufficient products to manufacture. Supporting domestic chip designers could generate more business for European factories while developing expertise across the semiconductor supply chain.
