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European Lawmakers Urge Quick Action on Chips Act 2.0 to Boost AI and Semiconductor Investment

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European lawmakers have called on the European Commission to expedite the development of a new support program for the region’s semiconductor industry, particularly focusing on investment in AI chips and addressing technological gaps. A letter, authored by representatives from three major factions in the European Parliament and signed by 54 lawmakers, emphasized the urgency of bolstering Europe’s semiconductor sector.

The letter highlighted recent geopolitical developments that have underscored the need for Europe to secure continued access to advanced technologies. Lawmakers expressed concern that the progress under the original 2023 Chips Act has been too slow, urging the European Commission to act more swiftly.

The lawmakers’ plea follows a similar call from leading European chip industry firms, which have also voiced concerns over the pace of progress. While the European Commission has signaled plans to launch five new investment packages this year to support European industries, including AI, the letter criticized the absence of semiconductor-focused measures in these packages. Semiconductors, the lawmakers stressed, are central to the EU’s industrial ambitions, and the current lack of targeted support for the sector could hinder Europe’s technological and economic future.

The initial EU Chips Act prompted a wave of investment but fell short of attracting advanced chipmakers, with Intel notably halting plans for a large new factory in Germany. The lawmakers urged the Commission to address these gaps and act quickly, especially given the current geopolitical realities surrounding competition between the United States and China.

The letter also emphasized the need for Europe to protect its key players from the implications of extraterritorial laws and the escalating global competition in the semiconductor industry.

EU Nations Push for Faster Progress in Semiconductor Industry

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A coalition of nine European Union countries, including Italy, France, Germany, Spain, and the Netherlands, is accelerating efforts to strengthen the EU’s semiconductor industry. The group aims to present proposals for enhancing the sector by summer, according to Dutch Economy Minister Dirk Beljaarts.

The coalition is working on “homework for the new Chips Act,” referring to the potential second EU funding program for the semiconductor industry, following the initial 2023 Chips Act. While the 2023 Act has been credited with preventing the decline of Europe’s chip industry amid larger support programs from the US and China, it has faced criticism for being too slow to meet key goals.

Beljaarts emphasized the need for more targeted funding in the upcoming Act, calling for both private and public investments to support the sector. He also highlighted the importance of ensuring that small and medium-sized companies benefit from this funding. Despite Europe’s strengths in research and development (R&D), he noted gaps in areas like chip packaging and advanced production, particularly after Intel’s decision to shelve plans for a cutting-edge factory in Germany.

The coalition is also exploring internal demand within EU countries to encourage investment from companies, ensuring that it is worthwhile for them to invest in the region.

The European Commission has expressed strong support for the initiative, which aims to complement, rather than undermine, the Commission’s efforts.

Micron Forecasts Strong Revenue Growth Driven by High AI Memory Chip Demand

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Micron Technology (MU.O) has forecasted a robust third-quarter revenue, exceeding Wall Street estimates, driven by growing demand for its high-bandwidth memory (HBM) chips crucial to artificial intelligence (AI) models. This surge in AI-related demand sent Micron’s shares up by 2% in after-hours trading.

The company highlighted that AI demand is significantly boosting the need for HBM chips, a specialized form of dynamic random access memory (DRAM) vital for advanced AI systems, particularly those powered by Nvidia’s (NVDA.O) processors—one of the major beneficiaries of the AI boom.

Micron’s Chief Business Officer, Sumit Sadana, told Reuters that the company expects continued sequential growth through 2025, driven by increased capacity and market share in HBM production. Notably, Micron’s HBM chips for 2025 are already sold out, reflecting strong demand.

In addition to HBM chips, Micron also provides flash memory NAND chips, with demand expected to rise across both data center and consumer markets. The company forecasts significant profitability improvements for fiscal 2025, which ends in August.

Michael Ashley Schulman, Chief Investment Officer at Running Point Capital, emphasized Micron’s key role in supplying essential memory components for AI infrastructure, noting that the company’s positive outlook underscores its importance in the rapidly expanding AI sector.

Micron’s forecast includes anticipated revenue of $8.80 billion, with a margin of plus or minus $200 million for the third quarter. This exceeds the consensus estimate of $8.5 billion. For the second quarter ending February 27, Micron posted revenue of $8.05 billion, surpassing the $7.89 billion estimate, with earnings per share of $1.56, well above the $1.42 forecast.

However, Micron also acknowledged the uncertainty surrounding potential new tariffs imposed by the Trump administration, stating that it has not factored the potential impact into its forecasts but plans to pass any costs on to customers.