Study: Semiconductors Crucial to Europe’s Defence Value Chain
A study presented on 10 June finds semiconductors are strategically critical to Europe’s defence value chain, even though defence accounts for only about one percent of EU semiconductor manufacturing.
Commissioned by Business Tampere’s Chips from Tampere programme and produced by consultancy Spinverse, the report was released as lawmakers prepare Chips Act 2.0, with the European Commission publishing its proposal in early June and negotiators in the European Parliament and among member states now weighing measures to boost supply resilience and increase demand for European-made components.
Researchers based their conclusions on interviews with key European stakeholders in the defence and semiconductor sectors and a background analysis of the value chain. Low production volumes make cost-efficiency a central challenge. Defence buyers prize price, performance and reliability, but the sector’s strategic importance demands greater supply resilience.
Petri Räsänen, Programme Director of Chips from Tampere, said stronger cross-sector cooperation is essential. "Europe’s strategic autonomy requires new semiconductor investments and much stronger cooperation between the defence, technology and semiconductor industries. The Chips from Tampere programme aims to ensure that Finland and the Tampere Region provide an attractive platform for new investments and international partnerships."
Dual-use technologies could help expand production volumes, since civilian sectors currently drive most semiconductor innovation and investment. The report notes fragmentation across Europe’s semiconductor ecosystem and recommends coordinated public funding, procurement policies and industrial cooperation to build scale. It points to robust market growth forecasts, estimating the defence-focused semiconductor market at USD 12.9 billion in 2025 and potentially USD 36.6 billion by 2035.
Locally, the Tampere Region is home to around 40 percent of Finland’s defence industry and is positioning itself to influence Chips Act negotiations. Business Tampere said it will use its EU links and its role as the chairing region of the European Semiconductor Regions Alliance to press for provisions that support regional investment and resilience.
The findings add to earlier developments highlighting Tampere’s role in defence and dual-use technologies regional hub recognition. They follow recent EU support for chip packaging and testing at Tampere University’s Hervanta campus EU-backed Hervanta pilot.
Earlier coverage
Catch the full story over at Business Tampere
