EU plans multibillion-euro chip factory to reduce foreign dependence

The European Union is preparing to build a semiconductor manufacturing plant worth tens of billions of euros to boost technological self-sufficiency, EU Commission Executive Vice President Henna Virkkunen told Yle during a visit to Oulu, Finland.

The project, set to advance in May, aims to produce advanced chips—particularly those needed for artificial intelligence—within Europe. Virkkunen emphasized that no single company or member state could undertake such a venture alone, requiring joint investment from interested parties.

“Semiconductors are the world’s third most traded commodity after oil and cars,” Virkkunen noted, highlighting Europe’s current reliance on foreign suppliers. While the EU already excels in chip design and research, she stressed the need to localize production, especially for high-performance AI components.

The initiative presents a significant opportunity for Finland, where Oulu has emerged as a key hub for semiconductor expertise—a legacy of Nokia’s historic mobile phone development. Aarno Pärssinen, a professor at the University of Oulu, described the city’s capabilities as rare in Europe, capable of designing complex chips using cutting-edge technology.

Virkkunen echoed this optimism, calling Oulu a longstanding “engine of technological progress” for both Finland and Europe. She suggested that future European devices could increasingly rely on chips designed in Oulu, building on Finland’s established role in microelectronics.

Semiconductors, materials that conduct electricity better than insulators but worse than metals, are essential for microchip production. Currently, most are manufactured in Taiwan.