Europe would love a few AI chip factories of its own. But if nobody in Europe needs those chips, investors will not come. Eva Maydell, the centre-right’s lead negotiator on the first Chips Act, tells Jennifer Baker on the EU Perspectives podcast that its sequel must follow real demand.

Eva Maydell (EPP/BGR) said the first Chips Act aimed to attract investment. Its revision should grow Europe’s strengths, close critical supply-chain gaps, and link investment to real demand. It should not try to do everything at once or seek to master the entire value chain.

The European Commission proposed a revision of the Chips Act on 3 June. MEPs are now working on their positions. Oliver Schenk (EPP/DEU) leads the file as rapporteur in the Committee on Industry, Research and Energy. Ms Maydell expects a first draft from the European Parliament by mid-November and its adoption by the end of February or early March. A final deal could follow by summer 2027, depending on negotiations between Parliament and the Council of the EU.

Fewer promises, sharper focus

With the second Chips Act, Europe should avoid overextending its resources, she warned. It should also avoid making promises it cannot keep.

“Often the mistake we make is we want to master everything, the whole value chain. We have to make sure that we don’t spread our limited resources too thin while we make promises that we cannot keep. Our goal should not just be to build more factories, but to build a competing ecosystem in the segments that we choose — those where we can lead,” Ms Maydell continued.

“When I first started working on the Chips Act, one for me it was very important that it would be a forward-looking oriented legislation. The point was not to put up barriers,” she explained.

“We want the rules-based order, but we also want to be a place where people want to invest. The aim and goal of the Chips Act 1 was to basically also make the Commission and member states think about how we can be an investment place. And what the Chips Act 1 did, and what I’ve argued at the time that it should do, is to attract new money,” Ms Maydell said.

No factories without buyers

The EU must also start making decisions faster, she said. “If the first Chips Act built the base, I think the Chips Act II must grow Europe’s share where we are strong to close the gaps that are important for Europe in the supply chain, in the value chain, and to tie investment to the real European demand, not just what we think investment should aim at,” she added.

The EU has traditionally been strong on research and needs to capitalise on that, she argued. Its priorities should include key sectors such as energy and defence.

“We would all love to have a couple of AI chip fabs in Europe, but should there be no demand for those chips on our market, it would be very difficult to attract those investments in the first place,” she said. “Of course, Europe is strong in automotive, energy grids are essential, and defence is becoming an industry where Europe is investing much more in its own industry. So these are some of the areas where it’s natural that we have demand in the years to come.”

Security matters

Ms Maydell agreed that the key areas for investment are often the same areas where Europe does not want to have external dependencies. “The past couple of years have been eye-opening for European economic security and for I think public administrations, policymakers, for each one of us understanding better why it’s important for us to be in the value chain, but most importantly indispensable in the value chain, and figuring out where that is in order to serve those sectors that are most important for our security.”

“The Chips Act also has to address the geopolitical goal, where we need to secure access to the chips that will determine our competitiveness and our security,” she added. “We have to make sure that we have fewer dependencies. It’s a twofold goal. But we need to be very thoughtful, not to try to cover the whole value chain.”

Predicting demand

She floated the idea of a European chip-demand outlook every two or three years to identify gaps and inform calls for investment. A confidential, industry-driven assessment could identify areas where Europe needs more investment. Such knowledge would lead to more predictable markets, she argued.

So what typically happens is the countries with the deepest pockets are able to set Europe’s priorities! — Eva Maydell (EPP/BGR), EPP lead negotiator on the first Chips Act

“What we need to do as Europe is to identify the gaps we can’t afford to miss, and that could be done in some sort of a demand outlook where companies and the industry share what are the demands that they actually need in order to give the intelligence, the knowledge, the predictability. On the industrial side, we need to link investments to the real demand, giving our industry a stronger voice. What is the demand, and what is it that they actually need? Then we could also better serve their expectations,” she said.

Finally, Ms Maydell said that state aid should support, but not define, the strategy. “State aid cannot be the whole strategy. State aid will remain part of the picture, but it cannot be our entire strategy. If we look at Chips Act 1, 90 per cent of the approved aid went to three countries, and the Commission managed only around five per cent of the money. So what typically happens is the countries with the deepest pockets are able to set Europe’s priorities!”