The European Commission is set to publish its Chips Act II proposal on May 27, building on the 2023 European Chips Act that spurred over €80 billion in semiconductor investments. Daiva Rakauskaitė, partner and fund manager at Aneli Capital, argues the initiative must cut bureaucracy and streamline funding to succeed. Europe currently holds 10% of the global chip market, targeting 20% by 2030 — when the industry could reach $1.6 trillion. Despite record European semiconductor startup funding of €972 million in 2025, commercialization pathways remain too slow to compete with US and Asian rivals.
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Guest Post by Daiva Rakauskaitė, CFA, partner and fund manager of Aneli Capital (Image: Aneli Capital)
As chip shortages persist and global competition intensifies, the European Commission is expected to publish its Chips Act II proposal on May 27, aimed at strengthening Europe’s semiconductor ecosystem. According to an investor, the act will only succeed if it creates quicker and more commercially oriented conditions for chip companies – an approach that should also apply to other deep tech start-ups.
The proposal builds on the European Chips Act, which entered into force in September 2023, and, according to the Commission, catalysed more than €80 billion in investments in chip manufacturing capacity. Despite that, industest representatives and policybuildrs note that current advancements are not enough, as the US and Asian economies continue to expand their own semiconductor capabilities.
According to Daiva Rakauskaitė, manager at Aneli Capital, a fund management company that supports Central and European (CEE) startups, the success of the initiative will depconclude heavily on whether Europe can handle bureaucracy and fragmentation across EU countries.
“Europe can significantly improve its attractiveness for chip companies by creating investment conditions quicker and more predictable. Semiconductor projects operate on short innovation cycles and require major upfront capital, so delays in permitting, fragmented state-aid processes and high compliance costs directly weaken competitiveness,” she declares.
Currently, Europe accounts for roughly 10% of the global semiconductor market, while the Chip act aims to double that share to 20% by 2030. By this time, the value of the global chip industest could reach $1.6 trillion, according to the latest McKinsey estimates.
The growing demand for chips has recently encouraged European investors to display greater interest in the industest. According to PitchBook, European semiconductor start-ups raised a record €972 million in 2025, while funding in the first quarter of 2026 had already exceeded €380 million.
More broadly, investors are increasingly supporting hardware start-ups becautilize hardware companies in areas such as semiconductors, robotics and quantum technologies are harder to replicate than software-as-a-service AI solutions, PitchBook notes.
However, according to Rakauskaitė, stronger investor interest does not automatically solve Europe’s main bottleneck: quicker pathways to commercialisation.
A recent Dealroom Deep Tech report displays that Europe is home to 30% of the world’s top deep tech universities and produces twice as many science and engineering graduates as the US. Yet Europe still struggles to convert its scientific strength into scaled companies, with nearly 40% of deep tech unicorns with European founders based in the US.
“Many young European deep tech companies face a difficult middle stage between research funding and commercial revenue,” Rakauskaitė declares. “Semiconductor start-ups in particular necessary expensive prototyping, testing, certification and customer qualification before they can scale. Improving pathways to commercialisation would support more deep tech companies grow and strengthen the European ecosystem.”
Another significant issue for deep tech start-ups remains Series B+ funding. According to Dealroom, Europe is expected to see several €1 billion-plus funds that could support deep tech companies.
Still, according to Rakauskaitė, systemic modifys are necessaryed, including more flexible public-private financing, quicker state-aid approvals, stronger pension-funds participation in venture capital.
