Autonomy or Indispensability? Identifying the EU’s Semiconductor Lodestar

The hyper-specialised division of labour underpinning the global semiconductor value chain has produced acute vulnerabilities. China increasingly weaponises supply chains against Europe, while President Trump threatens Nvidia’s AI chips, too. The risk of military conflict in East Asia, for example, over Taiwan or on the Korean Peninsula, has structurally increased as well. These developments threaten Europe’s economic and national security. In this new geopolitical era, Europe’s semiconductor strategy needs to pick a lodestar: autonomy or indispensability. Full autonomy means seeking resilience through rebuilding the entire value chain in Europe, at immense cost. Indispensability means pursuing leverage by consolidating control over strategic choke points that others rely on. The question is which end goal and policies will actually strengthen the security of supply of semiconductors to Europe and the EU industry and research technology organisation competitiveness. This second CHIPDIPLO policy paper draws on a structured consultation with fifty industry leaders, policymakers and think tank experts who examined four distinct 2035 backcasting scenarios. Each captures a radically different outlook for European and global semiconductor ecosystems. The conclusion is unequivocal. Full autonomy is neither realistic nor desirable. Indispensability without any autonomy leaves Europe unprotected from geopolitical fortuna. Europe’s only viable strategy lies in Allied Autonomy, European Indispensability: leveraging Europe’s core strengths, embedding them within trusted partnerships, and securing durable influence by expanding its choke points. To operationalise this strategy, the paper advances six sets of concrete policy recommendations, grounded in the workshop’s collective assessment.