European Union ministers have brought semiconductor sovereignty and merger policy onto the same competitiveness agenda, backing the broad objectives of Chips Act 2.0 while supporting competition rules that take greater account of innovation, resilience, and the ability of European companies to scale.

Meeting in Brussels on 24 September, internal-market and industry ministers broadly welcomed the European Commission’s second Chips Act proposal, which is intended to strengthen the semiconductor ecosystem, reduce strategic dependencies, and stimulate demand for chips produced within Europe. During the same Council meeting, they examined revised merger guidelines that would give greater prominence to factors including innovation, scale-up opportunities, sustainability, efficiencies, and long-term economic resilience.

The two policy files sit in different parts of EU law, although they increasingly intersect around a common economic problem. Europe wants deeper domestic technology capacity and businesses capable of competing internationally, while its competition regime must also prevent consolidation from weakening markets, raising barriers to entry, or reducing choice.

That tension has become more visible as semiconductors move from an industrial-policy concern into the foundations of artificial intelligence, cloud computing, communications, vehicles, and critical infrastructure. The Commission presented Chips Act 2.0 in June as a successor to the first programme, with a greater emphasis on demand, investment conditions, permitting, procurement, and resilience across the semiconductor value chain.

Scale enters the competition calculation

Ministers also considered the Commission’s overhaul of the EU’s merger-control guidelines, which is expected to conclude before the end of 2026. Member states broadly supported modernising the framework to reflect changing market conditions, while several governments stressed that wider economic considerations should not displace effective competition enforcement.

The proposed approach would give regulators more explicit room to consider whether a transaction improves innovation, creates efficiencies, strengthens resilience, or helps a European business achieve sufficient scale to compete internationally. Ministers also discussed the proposed innovation shield for startups and scaleups, which is intended to recognise that some acquisitions can help smaller companies expand without automatically treating consolidation as harmful.

Those arguments have become politically important because European technology policy is now expected to deliver several goals simultaneously. Governments want strategic technologies developed closer to home, more private investment, stronger companies, resilient supply chains, and competitive markets, even though those objectives do not always point in the same direction.

Semiconductors provide a useful example. Europe can support new fabrication plants, research, design capability, and public procurement, but the chip industry remains highly international, with intellectual property, specialist equipment, materials, manufacturing, and customers distributed across several regions.

Ministers therefore combined calls to reduce dependency with support for cooperation with trusted international partners. The emerging policy is less about technological isolation than deciding which dependencies create unacceptable economic or security risks, which capabilities Europe can realistically build, and where global supply chains remain unavoidable.

Technology sovereignty becomes a connected policy

The discussion also shows how previously separate areas of European technology policy are becoming more closely connected. Semiconductors, cloud infrastructure, artificial intelligence, open-source software, public procurement, state support, and competition policy increasingly sit within the same debate over economic sovereignty.

That trend is visible beyond Brussels. Germany and the Netherlands have, for example, launched a €40 million programme using AI-assisted design to shorten semiconductor development cycles, while governments across Europe are examining cloud procurement, sovereign infrastructure, and software dependencies as parts of the same competitiveness problem.

The policy challenge is therefore shifting from whether Europe should intervene in technology markets towards how those interventions interact. Supporting a domestic supplier can strengthen resilience, but protecting an incumbent can also weaken competition. Encouraging consolidation can create scale, while making it harder for new competitors to emerge. Public procurement can provide early demand, while poorly designed preferences can raise costs or narrow supplier choice.

The revised merger guidelines will not resolve those tensions by themselves, because transactions will still be assessed case by case. However, explicitly recognising innovation, resilience, and scale moves the economic-security debate closer to the machinery that determines which companies are allowed to combine.

Chips Act 2.0 is similarly moving semiconductor policy beyond subsidies for individual factories. The Commission wants stronger links between investment, customers, research, public purchasing, permitting, and the technologies Europe considers strategically important.

Both programmes remain unfinished, and the Council meeting did not settle either file. Yet the direction is increasingly apparent: Brussels is trying to make competition policy and technology sovereignty coexist within the same economic strategy, rather than asking industrial policy to create larger European technology businesses while merger policy evaluates them under a wholly separate set of assumptions.