Tech Sovereignty and the EU's Chips Act 2.0

Executive Summary 

With the publication of the Tech Sovereignty Package on 3 June 2026, the European Commission has, for the first time, put open strategic autonomy into concrete operational terms across a range of technology ecosystems, particularly artificial intelligence (AI) and semiconductors. The underlying logic is straightforward: Europe's long-term competitiveness and resilience cannot rest on domestic capabilities alone; they increasingly depend on strategic partnerships with like-minded allies. This resonates with a broader shift in the policy discourse around strategic indispensability, managed interdependence and middle-nation leverage. The Package redefines technological sovereignty less as autarky than as the ability to shape the terms of interdependence.

Using cooperation in semiconductors between the Republic of Korea (ROK) and the European Union (EU) as a case study, this paper analyses the second EU Chips Act (ECA 2.0) proposal and examines how "openness" is actually operationalised in the Commission's tech sovereignty stance. Additionally, we zoom in on the state of play in bilateral cooperation. In June 2026, the EU and the ROK launched the new Competitiveness Partnership, aiming to deepen cooperation on trade, investment, economic security and industrial policy – signalling that both sides intend to move beyond current collaboration regarding research and innovation. We put forward three avenues to put these words into action.

• Avenue 1 (business as usual) would continue the current research and development (R&D) focus and let commercial outcomes emerge organically. This avenue would fall short of the ambition both sides signalled with the Competitiveness Partnership.

• Avenue 2 (large-scale investment, e.g attracting a Korean leading-edge fab to Europe) has been the implicit goal shaping the EU discourse for some time now. Our analysis concludes that this is not the logical next step, for both political and economic reasons.

• Avenue 3 (strategic building blocks) is, based on our analysis, the most realistic path forward: a portfolio of smaller wins and trust-building measures that pave the way for deeper cooperation and, in time, could open the door to large-scale investment as well. Three blocks structure the approach:

  • Block 1: Bridge knowledge gaps by using the Strategic Mapping outlined in ECA 2.0 and the Semiconductor Regions of Excellence label to sharpen the EU's own understanding of its dependencies and communicate its strengths credibly to trusted partners.

  • Block 2: Increase industry engagement in political fora by bringing government-led and industry-led cooperation tracks closer together, through an EU-ROK (semiconductor) business council or the inclusion of the industry in the envisioned "high-level industry dialogue" under the Competitiveness Partnership, working groups on shared interests (green semiconductor technologies, chip design, compound semiconductors, defence applications) and a stronger joint EU-ROK presence at events such as SEMICON Korea and SEMICON Europe.

  • Block 3: Strengthen R&D with a Grand Challenges orientation by expanding joint R&D into shared AI hardware priorities aligned with the ECA 2.0 Grand Challenges, with an explicit focus on commercialising outcomes through joint ventures, spin-offs and smaller ecosystem investments.

These building blocks translate into four broader recommendations for EU tech diplomacy that reach well beyond the ROK case: first, communicate where openness is actually invited more clearly. Second, set clear priorities regarding alignment with the industry: with limited political bandwidth, effective Strategic Partnerships require sharp choices regarding whom to partner with and which technologies to focus on. Third, align cooperation interests through intermediate steps that produce small wins and build mutual trust. Fourth, clarify responsibilities and capacities across policy levels.

Introduction

In recent years, the nature of tech diplomacy has changed. Because of the high degree of market concentration and transnational interdependencies, technologies such as semiconductors and AI models are increasingly understood as strategic assets. ¹ Approaches to securing access and building out domestic capabilities are increasingly shaped by considerations of geopolitical leverage. ² In turn, decisions regarding who to partner with are increasingly being defined by "win-win" and "commercial reasonableness" perspectives on both ends, representing a clear focus on more transactional partnerships. ³ Concurrently, over recent years, the European Union (EU) has had to navigate and react to an environment that is markedly more uncertain both politically and technologically. An intensifying United States (US)-China technology rivalry, Donald Trump’s return to the White House and significant US advances in artificial intelligence (AI) resulted in Ursula von der Leyen's European Commission declaring a "geopolitical" orientation with a dedicated focus on "catching up with the AI frontier." ⁴

This trajectory started with the AI Continent Action Plan in April 2025 and culminated in the publication of the Tech Sovereignty Package on 3 June 2026. The latter includes two legislative proposals – the Chips Act 2.0 (ECA 2.0) and the Cloud and AI Development Act (CADA) – as well as the Open-Source Strategy and the Strategic Roadmap for Digitalisation and AI in Energy. ⁵ Together, these measures represent a comprehensive approach to technological sovereignty grounded in what the European Commission describes as "openness, partnership and fair competition. Strengthening the EU's technological base enables it to remain open and cooperative while safeguarding its capacity to act independently and protect its interests, security and democratic principles." ⁶ This approach represents the first concrete attempt to operationalise open strategic autonomy across different technology ecosystems. The EU aims to strengthen domestic capabilities while explicitly acknowledging that full autonomy is neither feasible nor desirable. Instead, Strategic Partnerships, which are explicitly proposed in ECA 2.0, become a defining principle going forward.

This development underlines how industrial policy must work along two dimensions at once. Long-term competitiveness and resilience cannot be centred around domestic capabilities alone; these goals increasingly depend on carefully navigating uncertain geopolitical waters while strengthening partnerships with like-minded allies – both to secure supply and to attract more investment into the EU.

This paper examines how openness to foreign-company participation and to international cooperation is operationalised in the instruments of the ECA 2.0.  We use cooperation in the semiconductor value chain between the Republic of Korea (ROK) and the EU as a case study for this broader question. For decades, Seoul has deliberately built up domestic industries to make itself indispensable to strategic technology ecosystems. Today, the Korean companies Samsung and SK hynix are front and centre in the current AI compute build-out, providing high-bandwidth memory (HBM) chips that are part of every AI accelerator. ⁷ Only Micron (in the US) is competing in this market segment.

In general, having leverage is highly important to the ROK, as they are reliant on China as a key export market and on the US as their security guarantor. Maintaining good relations with both underlines President Lee Jae Myung's stance of aiming for "win-win" partnerships. ⁸ As Washington and Beijing both push to win the AI race, newly proposed multilateral formats, such as Pax Silica (steered by the US) and the World Artificial Intelligence Cooperation Organization (WAICO; steered by China), increasingly put pressure on middle powers to declare an allegiance. The ROK signed a memorandum of understanding (MoU) regarding the Technology Prosperity Deal with Washington in late 2025, followed within weeks by the ROK becoming a founding member of Pax Silica, potentially aligning Seoul with all actors across the entire AI value chain with the US being in the centre. ⁹ Yet alignment buys less than it once did. In August 2026, Trump abruptly ordered a substantial reduction in joint military exercises between the two countries, citing Seoul's refusal to back the US campaign against Iran, while pushing for more Korean chip production plants in the US.

The EU's starting point was different: when the idea of digital partnerships was established around 2022, Brussels turned to partners sharing democratic values and placed information-sharing regarding the root causes of shortages and collective resilience measures at the centre of semiconductor cooperation. When Pax Silica was founded, the EU did not collectively communicate a clear stance right away. Instead, several member states joined first; only in the summer of 2026 did the EU became an official member. This decision aligns with the competitiveness shift spelled out in ECA 2.0, with the EU now turning to partners with advantages in the global semiconductor ecosystem. ¹⁰

On the bilateral level, cooperation between the ROK and the EU in semiconductors to date has mainly been fruitful in the areas of collective research and development (R&D) and sharing information to identify supply chain disruptions and avoid future chip shortages. But the latest developments indicate that both sides intend to change this. In June 2026, the EU-ROK Competitiveness Partnership was launched with the aim "to enhance competitiveness and economic resilience in a structured manner" ¹¹ and the intention to deepen their cooperation regarding economic security, trade and industrial policy through a high-level economic dialogue. ¹²

In this policy brief, we explore what these latest policy initiatives and partnerships could mean for the future of bilateral cooperation between the ROK and the EU. We will do so by connecting the dots between the proposed ECA 2.0 instruments most relevant for foreign-company participation and examining the status quo of the ROK-EU partnership. Based on an analysis of both, we put forward three avenues for cooperation. Each avenue spells out the implications of such cooperation and what it would take for EU policymakers to aim for outcomes in a partnership that is focused on competitiveness and economic resilience.