The structural shift towards European autonomy is already underway in the technology sector. Having relied on American and Asian capabilities for too long, Europe is now committed to reducing its technological dependence by strengthening its domestic capacities in strategic areas.
2030 Digital Decade
For much of the past decade, European policymakers have treated technology autonomy as a long-term aspiration. The assumption was that globalised supply chains were efficient, that American and Asian technology platforms were reliable partners, and that Europe's regulatory sophistication was a sufficient advantage. Each of those assumptions has since been tested and found wanting.
The Covid-era semiconductor shortage that halted automotive production across Europe was a first warning. The geopolitical fracturing that followed (such as trade restrictions, export controls) has since made the stakes viscerally clear. Technology is no longer simply an economic variable; it is a lever of power.
In response to this new environment, Europe has finally decided to strengthen its technological autonomy through a broad combination of regulation, investment and industrial policy. The 2030 Digital Decade, adopted in 2022, is the European Union’s strategic framework to drive technological transformation and secure the continent's digital sovereignty. This policy program sets out quantitative targets on digital skills, secure infrastructure, business digitalisation and online public services. It aggregates funding from multiple financial streams, totalling an estimated €250 billion to €300 billion in targeted digital investments.[1]
Europe's relationship with semiconductors is defined by a striking contradiction. The continent is home to the company that holds a global monopoly on the extreme ultraviolet (EUV) lithography machines without which no advanced chips can be manufactured anywhere in the world.
And yet Europe itself manufactures less than 10% of global chip output[2], with virtually no capacity in the sub-10nm nodes that power AI, data centres, and high-performance computing. The continent designs and enables but does not produce at scale.
This matters because production capacity is control. Whoever operates the fab (semiconductor fabrication plant) decides who gets chips first and who waits. Europe learned this the hard way in 2021, when Taiwanese foundries reallocated capacity to consumer electronics and European car factories ground to a halt. When the next shortage hits, Europe will again be at the back of the queue unless it builds production capacity of its own.
To prevent this worst-case scenario from happening again, the EU has established a binding goal: Europe must produce at least 20% of the world's semiconductors by value by 2030. Under the 2030 Digital Decade framework, the European Chips Act (September 2023) is designed to make this target possible. It provides the legal framework, relaxes state-aid rules for mega-fabs, and activates €43 billion in public and private funding to scale up domestic microchip design, prototyping, and manufacturing capacity.
Meanwhile, competition on artificial intelligence (AI) leadership continues to increase. AI, however, is not a product; it is infrastructure that industries, governments, and institutions will increasingly rely on to make decisions, allocate resources, and process information.
Today, Europe is overwhelmingly a consumer of that infrastructure, not a producer. At the software level, European firms depend almost entirely on US-developed foundational models, cloud platforms, and AI tools. In addition, models accessed via US cloud infrastructure are subject to American jurisdiction regardless of where the user is located.
To reduce Europe’s technological dependency, the AI Continent Action Plan (April 2025) plans to mobilise €200 billion in public and private investments. The primary goal is to leverage European industry, research, and talent to build an AI ecosystem that is competitive, sovereign, and aligned with democratic values. This plan notably foresees to allocate public funds to build high-performance computing (HPC) networks in Europe, including up to 19 AI Factories and 5 AI Gigafactories.
Concurrently, the Cloud and AI Development Act (CAIDA) is a specific legislative proposal that directly addresses the infrastructure gaps highlighted by the Action Plan. CAIDA is designed to boost and regulate private investments in commercial cloud and data centres. It notably aims to triple Europe's data centre capacity over the next 5 to 7 years, with a focus on green, energy-efficient facilities. It also plans to establish strict security requirements for critical cloud workloads (e.g. defence, healthcare), ensuring protection against foreign extraterritorial laws. CAIDA has not been adopted yet, but EU leaders aim to finalise and formally adopt the ACT by late 2027.
Meanwhile, cybersecurity has emerged as a core element of national resilience. With cyberattacks on critical infrastructure growing exponentially (ransomware attacks on European organisations climbed 81% in 2024[3]), the market for secure IT systems, encrypted communications, and AI-driven threat detection is booming.
According to Precedence Research, the global cybersecurity market is projected to exceed $500 billion by 2030[4], notably fuelled by AI. In response to this growing threat, the EU has adopted three cybersecurity laws, designed to establish a high, uniform level of cyber resilience across all member states. The EU is not alone: Governments and companies are prioritising cybersecurity as a strategic investment, driving long-term demand for innovative solutions.
The EU’s clear objective of strengthening its technological autonomy offers numerous investment opportunities in companies that will contribute to this ambition and benefit from various forms of financial support.
The semiconductor segment is the most obvious investment area, given its central role in the digital ecosystem and the EU’s target to increase its global market share in semis manufacturing to 20%.[5]
Some European software publishers also fall within this remit as they help to avoid strategic dependence on foreign powers and protect regional data.
European network equipment providers are strategic enablers of digital sovereignty, supplying the infrastructure that supports secure, resilient connectivity and helps safeguard the transmission of critical public and private data.
Telecommunication operators own and operate the networks underpinning Europe’s digital economy. Investment in fibre and 5G strengthens resilience, supports secure communications and reduces dependence on external infrastructure providers.
The road to European technological autonomy is still a long one, but for the first time we are seeing a clear commitment from the EU to reduce the most critical dependencies and regain control of digital infrastructure and strategic data. At Candriam, we support this new ambition and are convinced it opens up attractive investment opportunities.
Read the first piece in the series, Structural Shift Towards European Autonomy Gains Momentum
[1] Source: Commission Publishes State of the Digital Decade 2025 Report
[2] Source: European Chips Act | Shaping Europe’s digital future
[3] Source: Tictac Laboratories, 29 August, 2025
[4] Source: Precedence Research, 17 July 2025
[5] Source: The Digital Decade policy programme 2030, 9 January 2023.
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