The EU Wants Its Own Tech Supply Chain

The European Commission introduced a Tech Sovereignty Package on 3 June aimed at reducing the bloc's dependence on foreign technology, particularly from the United States, by boosting domestic semiconductor production, cloud capacity, open-source software, and grid infrastructure [1]. The package contains four components: the European Chips Act 2.0, the Cloud and AI Development Act (CADA), a strategy to promote open-source software, and a roadmap for Europe's electrical grids [1]. The first two are proposed laws that must now pass through the European Parliament and the Council of the European Union, a process that can alter their content [1][4]. The push reflects a broader concept of digital sovereignty, which the EU has pursued through a regulatory and rights-based approach to reduce structural dependence on dominant U.S. and Chinese technology companies [3]. The Chips Act 2.0 builds on a 2023 predecessor that aimed for a 20% share of the global market for cutting-edge and sustainable microchips by 2030 [1]. A 2025 audit found that the first act had made progress in chip design and pilot lines but deemed the target "unlikely to be sufficient" and "overly ambitious" [1]. The revised act adds demand-side measures to encourage governments and industry to use European chips, and it permits the Commission to fund certain fabrication plants as "strategic projects" with fast-tracked permitting [1]. It also proposes an open-access foundry to manufacture chips at 3 nm process nodes or lower, with pilot production possible between 2030 and 2033 [1]. Tillman Schenk, a researcher at the Bruegel think tank, said the Commission "devotes considerable attention to demand-side levers" but added that "these instruments currently strike me as somewhat underdeveloped" [1]. CADA calls for a tripling of EU data center capacity by the early 2030s [1]. Michael Winterson, Secretary General of the European Data Centre Association, said the goal is "achievable in principle" and that "demand alone could justify a tripling of capacity" [1]. The act stipulates that by 2030, data center operators should be able to obtain necessary permits and grid access in 18 months, a process that often takes years today [1]. The expansion arrives as the technology sector's electricity consumption is projected to rise by over 60% between 2020 and 2030, with Big Tech accounting for approximately 4% of global greenhouse gas emissions in 2023, surpassing the aviation industry [2]. Four U.S. hyperscalers—AWS, Microsoft Azure, Google Cloud, and IBM Cloud—currently account for over two-thirds of EU cloud services [1]. Amazon Web Services, a subsidiary of Amazon, is the world's largest cloud computing provider [5]. CADA introduces four assurance levels requiring varying degrees of EU-located data, infrastructure, and staff for sensitive workloads, though national authorities can choose levels as they see fit [1]. The open-source strategy notes that European public administrations spend an estimated €264 billion per year on proprietary IT, with 80% going to American companies [1]. Jordan Maris, EU Policy Analyst for the Open Source Initiative, said core software maintainers "will likely receive recognition and opportunities for funding" and that the measures could benefit enterprise software such as Nextcloud, Collabora Online, and Euro-Office [1]. The electrical grid roadmap, unlike the other components, is not a proposed law but a set of research projects and promises to introduce future legislation by the end of 2027 [1].