Mediaroom

The automotive industry is undergoing rapid transformation driven by advancements in autonomous driving, connected vehicles, software-defined architectures, and electric mobility. As these trends accelerate, they place automotive electronics and semiconductor technology at the forefront of innovation. Europe has built substantial expertise in automotive microcontrollers, sensors, power electronics, and system integration, yet faces increasing global competition. CLEPA has made available a comprehensive vision with strategic recommendations to reinforce the EU’s automotive electronics and semiconductor ecosystem.

The EU Chips Act has been an essential step in reinforcing semiconductor capabilities, and recent investment announcements in Europe signal commitment to the sector’s growth. However, to sustain and expand these efforts, Europe needs a robust, long-term strategy focused on four key pillars:

• Reinforce Europe’s R&D leadership: Europe must prioritise cutting-edge research and innovation in semiconductors and automotive electronics. This includes funding for new materials, advanced manufacturing processes, and chip integration in next-generation automotive technologies like battery management systems and autonomous driving. Horizon Europe and Framework Programme 10 should strategically support the entire semiconductor value chain to solidify Europe’s leadership. Additionally, a streamlined process for Important Projects of Common European Interest can improve efficiency, while support is needed for transitioning away from substances like PFAS used in semiconductor manufacturing.
• Strengthen competitiveness and investment conditions: To attract investment, Europe must address critical framework conditions, including reducing energy costs, ensuring a stable energy supply, expanding the talent pool, and simplifying regulatory and administrative processes. Competitive energy costs and a steady supply are vital for chip manufacturing, while reducing bureaucratic barriers will make Europe more attractive for investments.
• Secure streamlined funding for industrialisation: While the EU Chips Act has spurred significant investments in manufacturing, Europe must ensure that other areas of the automotive electronics value chain—such as complex chip design, advanced packaging, and system integration—are also supported. Balanced funding frameworks are necessary to address gaps and foster innovation across the sector.
• Expand access to global markets: Europe must engage in open trade and establish strategic partnerships with key partners like the US, Japan, South Korea, and Taiwan. Cooperation in R&D and manufacturing, as well as securing raw materials and diversifying supply chains, will enhance Europe’s competitiveness and resilience.