This policy brief analyses the role of Artificial Intelligence (AI) across the semiconductor supply chain, identifying key uses, opportunities, and challenges linked to the adoption of AI technologies. Its objective is to support EU policymakers in developing actionable strategies to maximise the effective use of AI in the semiconductor sector and strengthen Europe’s technological competitiveness.
The analysis highlights how AI can generate significant benefits in chip production, particularly through cost reduction and improved supply chain management. AI enables companies to process large volumes of real-time data, improving demand forecasting, production planning, inventory management, and product distribution. This allows companies to respond more effectively to disruptions such as shortages, crises, or logistical problems.
AI also plays a dual role in the semiconductor industry, acting both as an enabler of manufacturing digitalisation and as a tool to enhance semiconductor production itself. Applications include streamlining chip design processes, automating repetitive tasks, optimising chip parameters such as power, performance, and area (PPA), improving quality control, and supporting predictive maintenance. AI can also contribute to environmental sustainability by optimising energy and water consumption, supporting materials optimisation, and reducing emissions through improved production processes.
Despite these benefits, the brief identifies important challenges, including shortages of AI talent, data quality issues, and barriers faced by SMEs in adopting AI technologies. SMEs in particular face financial constraints, limited access to expertise, and risks such as vendor lock-in when relying on external AI providers.
To address these challenges, the policy brief emphasises the importance of open innovation (OI), particularly for SMEs. Open innovation encourages collaboration, knowledge sharing, and the use of open-source software tools to reduce costs and improve access to AI capabilities. The brief also highlights the importance of collaboration between industry, research organisations, and policymakers to strengthen innovation capacity across EU Member States.
The policy recommendations focus on main priorities, such as:
- Strengthening STEM education and AI skills development to address talent shortages, including investments in education, reskilling initiatives, and international talent attraction.
- Enhancing industry competitiveness through AI transparency, explainability, and trust, including support for the implementation of the AI Act, the use of regulatory sandboxes, and the promotion of trustworthy AI systems.
- Supporting SMEs through improved funding opportunities, guidance for AI adoption, promotion of open-source ecosystems, access to shared data resources, and the development of open standards to reduce dependency on proprietary vendors.
Overall, the brief concludes that the strategic integration of AI is essential to improve efficiency, resilience, and competitiveness in the European semiconductor industry. A central theme connecting the recommendations is the promotion of open innovation to support collaboration, knowledge exchange, and the development of a strong AI ecosystem across Europe.
