The European Union is stepping into the future of technology with a bold initiative to revolutionize the semiconductor industry, specifically through advancements in quantum chip technology.
At the heart of this ambitious drive is the Chips Joint Undertaking (Chips JU), an EU-backed program that recently announced a EUR 65 million (approximately USD 73 million) funding opportunity dedicated to quantum chip development. This funding, part of a larger EUR 200 million initiative scheduled over the next three years, aligns with the European Chips Act, a comprehensive policy framework enacted in September 2023 aimed at establishing Europe as a key player in global semiconductor and quantum technologies.
The Chips JU is driving several key initiatives aimed at bolstering Europe’s semiconductor ecosystem. Among these projects are ANDANTE (AI for new devices and edge technologies), LoLiPoP (focused on IoT long-life power platforms), A-IQ Ready (artificial intelligence utilizing quantum-measured information for real-time distributed systems), and PowerizeD (digitizing power electronics within critical technology sectors). These projects aim to address Europe’s semiconductor challenges by fostering cutting-edge innovation and facilitating the integration of AI, quantum technologies, and energy-efficient power solutions.
Related: European Commission Backs EUR 5 Billion for New German Semiconductor Plant
Addressing Europe’s Semiconductor Challenges
The semiconductor industry is at the core of modern technology, powering a wide range of essential sectors, from smartphones and gadgets to healthcare and defense systems.
One key challenge is the continent’s limited manufacturing capacity. As of 2022, Europe holds a minimal share of the global market for producing advanced integrated circuits (IC) substrates, which are crucial for the functionality of semiconductors in products like smartphones and electric vehicles. In fact, Europe’s capacity for advanced IC substrates is so low that it requires major investments, estimated at around USD 1 billion per new facility, to build high-volume manufacturing plants.
Furthermore, Europe’s global market share of semiconductor manufacturing is currently below 20%, far from the target of achieving 20% global chip production by 2030 as outlined in the EU Chips Act. Despite substantial efforts to ramp up production, the continent remains highly dependent on external suppliers, particularly in areas like chip assembly and testing, where Europe controls only about 5% of global capacity.
Europe’s ambition to strengthen its position in this critical field has led to a strategic shift toward technological independence. To achieve this, the European Chips Act was launched under five key pillars: enhancing research, expanding production, addressing skills shortages, bolstering manufacturing and packaging capabilities, and building a resilient supply chain. This comprehensive approach reflects Europe’s commitment to becoming a global leader in semiconductor technology and reducing its reliance on external markets.
The Chips Act’s goals are ambitious. By 2030, Europe aims to double its global market share in semiconductors, positioning itself as a vital player in an industry traditionally dominated by the United States and Asia. The Chips JU’s quantum chip funding call is the first significant investment made under this act, signaling a critical step toward building a robust semiconductor ecosystem that can address both current and future technological demands.
Broader Impact: United Kingdom Becomes Participating State in the Chips JU Program
Quantum Innovation
Unlike traditional silicon-based chips, quantum chips utilize quantum bits, or qubits, which allow for complex calculations far beyond the capacity of classical computers. By investing in quantum chip technology, Europe aims to open doors to solutions in various high-stakes fields, including artificial intelligence (AI), secure communications, and advanced drug discovery.
Quantum technology holds the potential to redefine encryption, optimize logistics through complex computations, and revolutionize industries reliant on big data and machine learning (ML).
The Chips JU’s EUR 65 million investment will facilitate research, development, and manufacturing, as well as support building a European supply chain for quantum technologies. Participating countries are expected to match this funding, creating a robust, collaborative effort to elevate Europe’s capabilities in the quantum sector. This investment will also address the unique manufacturing challenges of quantum chips, which require a highly specialized and adaptable infrastructure.
Several leading companies in Europe are making significant strides in quantum innovation. Sparkle has launched a Network-as-a-Service (NaaS) suite featuring a quantum-safe internet solution, with successful trials of post-quantum encrypted VPNs between Italy and Germany, as well as in Athens, ensuring secure, on-demand internet access for businesses.
Telefónica, in partnership with HaloTech, has introduced an IoT solution with post-quantum encryption, aimed at protecting connected devices in the face of quantum threats. Meanwhile, IBM has opened Europe’s first quantum data center to accelerate quantum research and help businesses integrate quantum technology into their operations. These efforts highlight Europe’s growing commitment to quantum security, positioning it as a leader in safeguarding next-generation communications.
Practical Implications for European Industries
As the Chips JU encourages quantum chip innovation, various sectors stand to benefit from new applications and enhanced capabilities. For instance, in logistics and supply chain management, quantum computing can help solve intricate optimization problems that are currently impossible for classical computers to address efficiently. This could streamline operations for industries dependent on highly complex logistics, such as e-commerce and global trade.
Similarly, the healthcare industry may witness transformative developments. Quantum chips have the potential to accelerate drug discovery by enabling molecular simulations that can predict how molecules interact, significantly reducing the time required for testing and development.
Advanced encryption methods supported by quantum chips could also enhance cybersecurity measures, safeguarding critical data in finance, defense, and government sectors. Moreover, AI and machine learning—fields reliant on processing vast amounts of data—will benefit from the heightened processing power of quantum chips, enabling breakthroughs in everything from natural language processing (NLP) to predictive analytics.
Building Talent and Resilience
To support the development and manufacturing goals laid out by the Chips Act, Europe must address a significant challenge: a shortage of skilled talent in the semiconductor industry. The Chips JU, therefore, is focusing on fostering education and training to cultivate a workforce equipped for these complex technologies. By attracting and retaining top talent, Europe can build a sustainable semiconductor workforce to drive quantum innovation and ensure the longevity of its technological advancements.
Furthermore, the Chips Act aims to establish a resilient semiconductor supply chain, reducing Europe’s dependency on foreign providers, and minimizing potential disruptions. Building domestic production capacity will enable Europe to maintain a steady supply of advanced chips and mitigate vulnerabilities in critical sectors such as defense and telecommunications.
A Quantum-Powered Future
As the January 2025 deadline for project proposals under the Chips JU’s quantum chip funding call approaches, Europe is rallying its resources and talents to become a pioneer in quantum technology. The Chips Act and the Chips JU funding initiatives illustrate the EU’s commitment to achieving technological sovereignty and global competitiveness in the semiconductor sector. This effort is not merely about catching up with global leaders; it aims to establish Europe as an innovator in cutting-edge quantum technologies that promise to shape the future.
Through the Chips JU and the strategic direction of the Chips Act, Europe is positioning itself as a hub for quantum innovation, fostering an environment where industries reliant on advanced computing can thrive. This investment in quantum chips marks the beginning of a new chapter for Europe, one where technological advancements are not only supported but driven by European innovation.
