Europe wants to reduce its dependence on Asian and American technology structures — and is therefore courting Taiwan more intensely. The second EU-Taiwan Semiconductor Industry Dialogue in Taipei was not limited to new fabs. The Commission discussed AI-chip design, packaging, system integration and Taiwan's potential role in Europe's expanding data-centre infrastructure with companies and research institutes.
At first glance, that sounds contradictory: more sovereignty through deeper cooperation with an external partner. Technically, however, it is far more realistic than the idea of a fully self-sufficient European semiconductor industry.
Chips Act 2.0 shifts the focus
The European Commission published details of the dialogue on September 1, after the event was held on August 31 alongside SEMICON Taiwan. It explicitly focused on how the new Chips Act 2.0 and Europe's accelerating demand for AI chips and data-centre capacity are changing industrial cooperation.
The Chips Act 2.0 proposal is intended to support advanced semiconductor capabilities in the EU and reduce strategic dependencies. A key lesson is becoming clearer than it was in the first European Chips Act: one fab does not create a complete semiconductor ecosystem.
Taiwan offers more than foundry capacity
Taiwan's strength is often reduced to TSMC. The value chain extends much further. Advanced packaging, testing, substrates, system integration, server manufacturing, production equipment and a dense network of specialist suppliers are all part of its advantage.
That is why the EU dialogue was not simply about attracting Taiwanese foundries. One panel explicitly examined Europe's AI stack, while another looked at combining European ambitions in chip architecture, design tools and IP with Taiwanese strengths in manufacturing, packaging and system integration.
The US shows how expensive chip diplomacy becomes
Europe is not competing in a vacuum. Reuters reports on September 7 that TSMC is now investing $265 billion in Arizona. Taiwan's Economy Minister Kung Ming-hsin also said at SEMICON that Taiwanese companies were planning another $20 billion of investment in the United States.
Washington combines industrial policy, market size, security relationships and tariff policy. For Europe, that means subsidies alone are not enough. Companies also decide based on energy costs, permitting speed, talent, nearby customers and the availability of upstream and downstream supply chains.
A European fab can still remain dependent
A chip physically manufactured in Europe is not automatically technologically sovereign. Design software may come from the United States, specialty chemicals from Japan, manufacturing equipment from the Netherlands, IP blocks from several countries and packaging capacity still from Taiwan. International specialisation is not inherently a failure — but it needs to be described honestly.
The realistic goal is therefore not autarky but controllable dependency. Europe needs multiple supply paths, domestic capabilities at critical points and the ability to continue operating through political or logistical disruption. One prestigious fab does not solve that problem.
AI makes the gap more urgent
The new dialogue also matters because AI infrastructure is shifting the traditional boundaries of the chip industry. A modern accelerator is practically useless without HBM, advanced packaging, high-speed networking, power delivery and server integration. The economically relevant unit is increasingly the complete compute system rather than the individual die.
Europe has strong positions in lithography, power electronics, industrial chips, research and parts of automation. It is weaker in leading AI accelerators, large-scale foundry capacity and parts of the packaging ecosystem. Partnership with Taiwan can close some of those gaps faster than rebuilding every layer from scratch.
The geopolitical caveat remains
Deeper cooperation with Taiwan improves Europe's industrial depth but does not remove geopolitical risk around the Taiwan Strait. That is precisely why the strategy should not simply rename one geographic dependency. European investment needs to bring knowledge, suppliers and real operational capability with it.
Taiwan, meanwhile, has its own interest in internationalising production without hollowing out its domestic core. President Lai Ching-te presents the expansion as a path toward shared resilience. For Taiwan, chip diplomacy is economic policy, security policy and foreign policy at the same time.
Pandorex View
The second EU-Taiwan dialogue is more interesting than another subsidy pot. It suggests Brussels is slowly moving beyond the idea that “one fab equals sovereignty” and looking at the wider AI and semiconductor chain.
Chips Act 2.0 will be useful if Europe connects fabrication with design capability, packaging, energy, talent, suppliers and customers. Europe's realistic strength is not complete autarky. It is distributing critical dependencies well enough that no single country or company becomes the off switch for its own AI infrastructure.
Relevance: 9/10 · Strategic importance: 10/10 · Regulatory importance: 9/10 · Confidence in concrete European investment outcomes: 6/10