The year 2025 reshaped the global semiconductor industry more profoundly than any year since the pandemic. After a period of volatility, the sector returned to strong growth, driven above all by artificial intelligence and electrification. At the same time, geopolitical tensions, supply-chain shifts and major investment decisions defined the strategic landscape. For Europe — and particularly for the Czech Republic — 2025 became a year of both opportunity and reckoning.
One of the clearest signals came from the market itself: the global chip industry is on track to grow by more than eleven percent, reaching around 701 billion dollars. This rebound confirms that the recent downturn was cyclical rather than structural. It also strengthens the strategic ambitions of the EU Chips Act, which seeks to double Europe’s share of world production by 2030. For Czechia, with its strong automotive and industrial base, the revival of global demand supports long-term investment and reinforces the need for domestic semiconductor capacity.
One of the impacts of the Chips Act is also the establishment of Czech Semiconductor Centre in the spring of 2025. With the aim of helping small and medium-sized companies, students, and corporations, the CSC was established as a consortium of six key partners from the academic and commercial sectors: Brno University of Technology, Czech Technical University in Prague, onsemi, Codasip, the JIC innovation agency, and the Czech National Semiconductor Cluster.
A major milestone in 2025 was the launch of the aCCCess initiative — a European programme to build a connected network of competence centres across the continent. aCCCess aims to establish the European Network of Chips Competence Centres, integrating national competence centres, pilot manufacturing lines and a shared design platform into a unified ecosystem. Through this infrastructure, small and medium-sized companies, start-ups, research institutions and universities will gain access to advanced design tools, prototyping capabilities, testing facilities and small-batch semiconductor manufacturing without having to rely solely on major foundries outside Europe.
The AI boom has pushed demand for advanced-node production to unprecedented levels. TSMC reported that its capacity for seven-nanometre-class technologies is “three times short” of what the market requires. The bottleneck extends beyond wafers to equipment, energy infrastructure and skilled labour. Globally, this creates higher prices and longer lead times; in Europe, it highlights both the continent’s dependence on Asian manufacturing and its strategic strength in equipment and power electronics. For Czechia, this imbalance increases the relevance of local investments in silicon carbide technologies and strengthens the country’s position within the European power-semiconductor ecosystem.
In the United States, the CHIPS and Science Act continued to accelerate domestic manufacturing. Support expanded to include critical suppliers as TSMC’s Arizona campus reached key milestones, including the start of 4 nm production. These moves consolidate the US as one of the future centres of advanced manufacturing. For Europe, they raise the stakes: subsidies must be competitive, permitting must be streamlined and supply-chain coordination must improve to match US momentum.
Within Europe itself, 2025 was the first year when the Chips Act turned from ambition to execution. Most of the Chips for Europe budget has already been committed, with new pilot lines and a strong focus on building a European chip design platform. This shift is significant, because Europe’s weakness in fabless design has long limited its competitiveness. Still, the year also revealed the limits of Europe’s current strategy. The European Court of Auditors warned that existing efforts are not enough to achieve strategic autonomy, prompting calls for a “Chips Act 2.0” that would address talent shortages, regulatory barriers and the competitive gap with the US and Asia. These findings strengthen the case for member states, including Czechia, to align industrial policy and education systems with the needs of a rapidly expanding semiconductor sector.
Europe’s ambitions were further tested by Intel’s decision to cancel its planned megafab in Magdeburg. The setback demonstrated how fragile large-scale investments are when cost structures shift. However, another project moved in the opposite direction: TSMC’s Dresden fab advanced into full construction. With production expected in 2027, it will become Europe’s most important new manufacturing site for automotive-grade semiconductors. For Czech industry, closely tied to German manufacturing, this provides a critical regional supply source and an opportunity for deeper supply-chain integration.
For the Czech Republic, the single most significant development was the approval of 450 million euros in state aid for onsemi’s expansion in Roznov pod Radhostem. This investment will create a vertically integrated silicon carbide hub, positioning Czechia as one of Europe’s leading centres for advanced power semiconductors — essential for electric vehicles, renewables and data-center power systems. It represents a strategic opportunity to build a local cluster in one of the fastest-growing segments of the industry.
A significant element of Europe’s semiconductor and AI ambitions in 2025 is the emergence of the AI Factory initiative – a flagship European project designed to build a coordinated, continent-wide ecosystem for AI computing, data infrastructure, and advanced chip design. The Czech Republic is among the successful applicants. The national consortium of six partners, led by VSB – Technical University of Ostrava, will establish the Czech AI Factory (CZAI). The initiative will include the acquisition of a powerful new AI supercomputer and the launch of a comprehensive portfolio of AI services provided by the consortium’s experts.
Geopolitics continued to shape the year as European firms felt the impact of US–China export tensions, particularly in the case of ASML. Dutch exports of chip-making equipment to China declined under tightening controls, highlighting Europe’s delicate position between security concerns and industrial interests. For Czech companies reliant on predictable chip supplies, these disruptions further underline the importance of building more resilient European manufacturing.
According to a recent OECD report, the Czech Republic has emerged as one of the world’s major suppliers of equipment and services for chip manufacturing. The OECD has published a study mapping the semiconductor supply chain, which is generally very extensive and interconnected due to the complexity of chip production. The Czech Republic appears in two categories in the study, both related to the supply of equipment for semiconductor production. For example: Czechia is one of the main leaders in instrumentation for chip manufacturing – particularly electron microscopes.
A final emblematic event came from the design ecosystem: Nvidia invested around two billion dollars into Synopsys, signalling the deepening fusion between AI chipmakers and the EDA tools that shape future architectures. This reinforces why Europe’s push into design capabilities is so critical — without strong design ecosystems, manufacturing initiatives alone cannot secure technological competitiveness.
Overall, the semiconductor story of 2025 is one of acceleration. AI demand is reshaping industry priorities, the US and Asia are executing massive industrial strategies, and Europe is finally moving from planning to building.
