"Made in Europe” is the last thing you would expect to see if you took a look at the internal parts of your mobile phone. But the European Union aims to change this by boosting the continent’s 10% share of the microchips market.
Microchips are essential for every one of the 40 billion connected devices in use around the world. In 2023, the European Chips Act was introduced to help increase production of microchips on the continent and make Europe more independent in this market.
Europe wants more digital sovereignty, which means it would have the ability to produce and control the data, hardware and software used in digital devices. It’s estimated that 92% of the data used on digital devices in the West is hosted online in the United States, which makes Europe vulnerable and dependent on outside actors.
The main challenge for European companies in this sector, particularly small firms, is financing. This shortage of investment is caused by high capital needs, high risk, complexity of projects and longer timeframes needed to make a profit on an investment.
With funding from the InvestEU Advisory Hub, EIB Advisory launched an initiative to help get more financing for companies in strategic technologies sectors, such as chips and semiconductors. The initiative, called the Chips Finance Lab, started at the beginning of 2024 and brings together semiconductor companies, financial experts and policymakers to gather real-time information on the evolution of the sector and identify new challenges and opportunities.
In January 2024, a kick-off online seminar was held to tackle investment barriers that semiconductor companies face in the European Union and identify sources of financing. In June, equity and venture capital experts held an online class on how to approach and make pitches to equity investors, guiding participant companies through the fundraising process and addressing key aspects, such as mindset, timing, geography and the broader business environment.
In September, an online and in-person financing lab was offered to showcase financial products from the European Investment Bank, the European Investment Fund and the European Innovation Council. The lab also explained how to seek financing from these organisations. The EIB Advisory’s services were also presented, including a range of assistance, from reviewing business plans, financial projections and pitch decks, to conducting bespoke market studies. Attendees also had the opportunity to hear from recipients of financial products and listen to their experiences.
The Chips Finance Lab will continue to help develop a finance ecosystem for companies in the semiconductor sector. The goal is to create a dynamic community of European technology companies that can get better financing and grow.
