Globally, the long-term market trend for electronic components is expected to exceed US $1,000 billion by 2030¹. In Europe, the semiconductor ecosystem employs some 250,000 people, with 2.5 million in the overall value chain of equipment, materials, semiconductors components, system integration, applications and services – mostly in jobs requiring a high level of education.

The demand for chips is expected to double by 2030, driven by the digitalisation of society and the pervasiveness of Artificial Intelligence.

Given that in the next decade, 85% of overall global growth is projected to take place outside the EU², it is essential that the EU maintains and increases the worldwide competitiveness of its electronics component industrial ecosystem. In turn, this increased competitiveness will stimulate all the ECS value chain and downstream industries that depend on it, including transportation, healthcare, energy, security, and telecommunications, to name a few. It is a key ingredient to maintain manufacturing as the backbone of the European economy, to guide further digitalisation of society and industry, ensure Europe’s sovereignty and resilience against crises situations, facilitate the digital single market, maintain employment and move towards a better, smarter society.

Maintaining competitiveness of the European ECS value chain

Even though the European microchips manufacturing market share is only around 10 %, the European share of integrated products and electronic systems is much higher, for example in the automotive and telecom sectors. Many European companies master specialties technologies, including integration of those technologies into smart systems, combining hardware and software - including firmware and middleware -, which allow them to grab a relatively high share of the end-product value.

Systems-of-systems⁴ and their formalisation were originally conceived and studied in the defence domain, but they are (and will be) vital infrastructure for many other vertical domains. For example, the shift in the mobility sector towards electrification and autonomous mobility necessitates the adoption of systems-of-systems in e.g. vehicles and roadside infrastructure. Given current and future expectations of the market, investment in SoS research and innovation⁵ is essential to European leadership in the mobility sector. Likewise, to remain at the state-of-the-art in embedded systems architecture and software Europe should continue to invest in this domain, despite fierce competition. From this perspective, the convergence between AI and edge computing - embedded intelligence - should be a top priority.

Europe is also internationally known for its high-quality products. European engineers are highly skilled in systems engineering, including integration, validation and testing, thus ensuring system qualities such as safety, security, reliability, etc, for their products, using development and test tools and frameworks enabling them to ensure these qualities in an effort- and cost-efficient manner following international and European standards. The EU has a robust and reliable safety and product liability regulatory framework, and a rigorous body of safety standards, complemented by national, non-harmonised liability regulations. This ability to provide high quality products at affordable costs has led to trustworthiness with customers on the one hand and increased competitiveness on the other hand, which have been big success factors for European embedded systems in almost all industries.

Europe should take benefit of its specific strengths, and of its ambitious plans - such as the “European Green Deal” - to make its ECS industry even more sustainable and competitive producing trustworthy products.

Sovereignty

European strategic autonomy in ECS calls for further collaboration between European companies and organizations. Design frameworks, reference architectures and integration platforms will lead to new design ecosystems. Integration platforms⁶ will provide the opportunity to leverage a high number of small and medium-sized enterprises (SMEs) and larger businesses into a platform-based economy mirroring the existing highly successful platforms of, for example, Google and Apple.

 

The above holds in particular for EDA Design Platforms, where global, non-European players like Synopsis and Cadence rule an overwhelming part of the market and thus de-facto control if, where and by whom such ecosystems can evolve. Providing European alternatives for such platforms will support technical enhancements e.g. the development of edge AI, embedded AI and embedded computing chips, support of the Open-Source Hardware Community (i.e., RISC-V), and many others. It will also facilitate the development of ecosystems, e.g. allowing to have a one-shop entry for start-ups/SMEs and academia to validate their innovations and new architectures into silicon, providing non-differentiating IP’s, tool support, and a coherent design environment.

The Green Deal objectives will further drive the production of renewable energy and the large-scale adaptation of (bi-directional) battery electric vehicles and heat pumps. Consequently, Europe will have to modernize its energy grid towards a highly dynamic, blackout-protected energy infrastructure, also significantly reducing the dependency on imported fossil fuels.

Advancements in ECS, particularly in edge AI computing and in mastering the integration task into its products, will substantially contribute to enabling European Industries to build systems with guaranteed quality properties. Europe’s strengths in creating trustworthy dependable systems by high-quality system design (“made in Europe” quality) contributes to European strategic digital autonomy.

Resilience

The Covid-19 pandemic has revealed the vulnerability of global, distributed value chains, with a disturbing and costly impact on society. In order to mitigate the impact of such disasters it is essential that strategic industrial ecosystems receive the backing from the EU. New models that will bring greater efficiency and more agile production processes need to be developed, and European manufacturing must be strengthened in key areas. This will ensure an effective and swift reaction to sudden market shocks as well as flexible manufacturing, accommodating shorter life cycles of products and fabrication-on-demand. Again, ECS innovations will play a key role here.

 

In semiconductor manufacturing specifically, Europe can reinforce its lead in semiconductor processing and packaging, equipment and smart systems based on the priorities set out in this ECS SRIA. The first Important Project of Common European Interest (IPCEI) on microelectronics, for example, was a successful step towards strengthening European semiconductor manufacturing in strategic areas where large-scale subsidies in other regions have started to threaten the position of European players. The European Commission has set ambitious targets⁷ in its ‘Digital Compass’ to double the ’cutting-edge semiconductor’ manufacturing share in Europe in 2030 – to maintain strategic autonomy, and to be involved in AI and other key technologies of the digital world.

Further, the EU can help national governments, companies and citizens to cooperate more easily, and develop reliable societal emergency infrastructures. This will make European societies better prepared to deal with emergency and crisis situations.

Employment challenges

The European electronics industry is currently facing a skill gap. Sufficient numbers of engineers with the right skills are crucial for Europe to compete with other regions and exploit the sector's true potential for the European economy. Faced with these challenges, Europe can play on two levers to develop a strategic advantage vs. other regions of the world:

• On the one hand, it must maintain and strengthen its traditionally strong and advanced educational system, and the presence of world-leading research institutes throughout the whole stack of competencies. Universities have a vital role in the supply of graduate engineers, and it is essential that graduates have access to industry-relevant design tools, leading edge technologies and training. Programs such as EUROPRACTICE are essential in providing this access in an affordable manner. Likewise, continued investment in semiconductor-related studies, as intended under the Pact for Skills⁸, is crucial to reversing the current trend of declining numbers of students.

• On the other hand, there is a need to drastically increase the efficiency of engineering activities throughout the whole design / develop / test / validation process by providing new tools that are able to handle new product features which in turn are enabled by usage of AI and other new technologies. Model-based and AI-supported technologies will contribute considerably to the increase in efficiency, the increase in capabilities, the mitigation of shortage in software engineering resources, and further improve overall software consistency and quality.

While ECS is facing a skill gap, other industries are at risk of suffering job losses. For example, Europe’s automotive industry employs around twelve million people. Currently, the transportation sector is undergoing a fundamental and complex transformation across all modes. Its position is challenged by US information technology giants and aggressive and new agile Chinese automotive companies. The ECS community will contribute substantially to maintaining competitiveness, and therefore jobs, of the European car industry by using new technologies, components and systems to target areas like autonomous vehicles, electrified CO₂-neutral vehicles, Over-the-air (OTA) updates and new mobility concepts to reduce overall energy usage (e.g. mobility as a service).

Conclusion

The global digitalisation of society and industries is enabled by ongoing innovations in ECS. With its specific strengths Europe is well positioned to prevail in the fierce global competition. We are strong in embedded systems architecture and software, in embedded intelligence, in specialties semiconductors (Power, RF, sensors, FD-SOI, MEMS…), and in maintaining overall high quality, safety and security standards in ECS. Therefore, the European ECS market prospects are seen as strong.

Further investments in the future of electronic components, modules and systems integration have the following strategic advantages for Europe:

• Strengthening Europe’s economy through the generation of high-tech innovations.

• Increasing the added value in Europe by integrating more functional systems and products, e.g. in automotive, med tech and telecom industries.

• Enabling a successful Twin Transition (Green and Digital) in an economically feasible way through multifunctional smart devices.

• Ensuring European sovereignty and securing strategic Intellectual Property from European companies on advanced technologies in the microelectronic ecosystem with regards to heterogeneous integration.

To maintain leading positions in specific markets Europe must continue to invest in RD&I in strategic ECS technologies, including disruptive technologies like high NA lithography, 2D-materials, quantum computing and related technologies, AI based development, design and verification methodologies, scalable platform technologies and differentiating capabilities by software. With strategic initiatives like the Green Deal, the Digital single market, the Pact for Skills, and the Chips Act, to name a few, the European Commission has already taken important steps to secure a healthy future for the ECS industry in Europe, and therefore for many ECS-enabled end-product industries. The ambition of the ECS Strategic Research and Innovation Agenda is to support, enable and amplify that effort, by:

• Strengthening industry involvement: Strategic R&D and manufacturing investments in disruptive technologies, needed to cope with the transition challenges of our society (digitalization and sustainability, EU sovereignty), as depicted in the ECS SRIA, need collaborative approaches for R&D and governmental support for lowering the risks for realization and implementation. Therefore, in particular industries with high R&D intensities addressing key enabling technologies to solve global challenges, such as Electronic Components and Systems (ECS), should be supported to grow;

• Providing guidance to join forces: For our continent with federal democratic structures and a high degree of individual required solutions, joining forces in a billion-market environment is the only viable approach to be well set-up for the future despite having limited resources. Collaborative RD&I projects are one of the main instruments to that effect in our federal eco-system.

Besides its economical weight per se, the strategic importance for Europe of the ECS ecosystem is further strengthened due to its role as the enabler of the digitalisation of our society.

Digitised services based on smart electronic components and systems (ECS) are becoming increasingly ubiquitous, penetrating every aspect of our lives. They also provide ever greater functionality, more connectivity and more autonomy. The benefits to society are numerous: safer traffic, less carbon emission and pollution, instantaneous access to information, convenience and cost saving in e-health, more efficient factories, more social safety, and many more. In short, ECS-based applications and services are key to ensuring the stable growth and development of the European Union.

On the other hand, our dependency on ECS-based applications is also continuously growing. This reinforces people’s concerns on – among others – the security of privacy and personal possessions (e.g. through cybercrime, cloud services, surveillance cameras), on personal safety (driver-assistance, e-health), and on the unclear impact of transformational technologies (AI, quantum technology). The societal concerns arising from these technologies need to be addressed. To achieve that, it is vitally important that these electronic systems are safe, secure and trustworthy. A human-centred approach is a key aspect of the EU’s policy on technology development, and in line with fundamental European social and ethical values.

In the following pages, we examine in more details the societal benefits which ECS brings to Europe, and where R&I efforts are needed to ensure further gains.

Sustainability

Contribution of ECS technologies to sustainability are two-fold:

On the one hand, ECS are a major enabler of the Green Deal objectives as they foster sustainable and smart mobility; the supply of clean, affordable and secure energy, resource-efficient manufacturing, a healthy and environment-friendly food supply chain, healthcare transformation, as well as more efficient information systems.

To accelerate the shift towards sustainable and smart mobility, the mobility sector requires energy efficient mobility grade semiconductor devices, be it for vehicles or for the supporting infrastructure required for the charging of EV’s. This needs to be complemented with middleware and embedded SW applications, which are often part of a cloud-to-edge continuum.

In the energy sector, the power grid architecture will be transformed into a multi-modal energy system architecture. It will comprise distributed renewable energy generation, energy conversion units for sector coupling, transmission and distribution grids allowing bi-directional power flow, and storage for all modes of energy (electric, thermal, chemical). Key to these new energy applications will be smart sensors, networks of sensors, and smart actuators that enable status monitoring on each grid level, as well as smart converters (for all voltage levels) based on highly efficient and fast-switching semiconductor power devices and modules that enable real-time control of energy system components and grids for optimised operation based on forecasts of generation and demand, but also in case of any critical event. The future grid operation, finally, requires a sophisticated information and communication infrastructure including cloud services, IT security, and AI technologies.

Besides, ECS will be at the core of implementing new ways of manufacturing, to promote an environmentally friendly production and to develop building blocks in advanced automation and control, advanced sensors, digital twins, artificial intelligence, collaborative robotics, monitoring through value chains – that will allow for better accuracy and performance, better (predictive) maintenance and higher asset utilization. It is particularly important to ensure that design processes will cover the complete lifecycle of products for future ECS-based applications. Data must be collected to this aim, and used to enable continuous updates and upgrades of products, but also in-the-field tests of properties that cannot be assessed at design-, development- or testing-time. This will as well increase the effectiveness of validation and test steps by virtual validation methods based on this data.

Another major application sector for ECS is agriculture, where policies focus on preservation of landscapes, biodiversity, and environmental protection. This will require measurement and monitoring technology which is accurate, highly scalable, and secure. In addition to these environmental requirements, Smart Internet of Things (IoT) systems support productivity growth, access to clean water, fertile soil and healthy air for all, and help fighting against pests while preserving biodiversity and restoring the planet’s ecosystems.

Healthcare digitization will enable the shift from hospital care to remote care at home, thus reducing travel-induced environmental impact, while personalized medicine will reduce waste in resources.

Finally, edge computing and embedded intelligence will allow to significantly reduce the energy consumption for data transmissions (e.g. to the cloud), will save resources in key domains of Europe’s industrial systems, and will improve the efficient use of natural resources.

On the other hand, the ECS sector is focusing on improving its own energy performance and disposability of electronic components and reducing its environmental footprint by means of cleaner and greener production processes, more circularity and less energy and material consumption. These efforts are mandatory since the demand for ECS is set to grow considerably to serve environmentally sustainable applications, and we cannot allow this to translate into an equivalent increase in the resources consumed in their production and operation.

The sustainable manufacturing of semiconductors requires the continuation of significant R&I on new processes, manufacturing techniques, equipment and materials. Advances in the manufacturing of chips and packages in the coming years will strongly contribute to Europe’s ambition to become climate-neutral by 2050. Some examples are:

• Device scaling - by moving into 3D for sub-3 nm node memory - and computing technologies will drive down energy consumption following the power, performance, area and cost (PPAC) scaling roadmaps.

• New embedded non-volatile memory technologies enable local processing and storage of configuration data, decreasing data transmission and energy needs for a wide range of automotive and IoT applications.

• New power electronics devices, either based on silicon or new (GaN, SiC) materials, will increase the energy efficiency of electric powertrains, energy storage, lighting systems, etc.

• Improved integration technologies and miniaturisation will support sustainability of products and production technologies.

One key point of attention is the development and use of replacement materials to comply with Restriction of Hazardous Substances Directive (ROHS) regulations (such as lead, mercury and other metals, flame retardants and certain phthalates, PFAS⁹) and minimization of critical raw materials (CRM) dependence. In particular, due to their unique physicochemical properties, PFAS are currently extensively used in both chip fabrication and for semiconductor manufacturing equipment and factory infrastructure. Research to identify alternative chemistries and to develop efficient abatement technologies for uses where no alternative can be found is therefore essential.

Beyond the sustainability of the components, modules and systems fabrication stage, the full life cycle and end-of-life of ECS should be considered using life-cycle assessment (LCA) as a design tool. There must be upstream considerations and design for sustainable production and condition monitoring, HW and SW upgradeability, lifetime extension, health monitoring, predictive maintenance and repair. These are all to be integrated into a lifecycle-spanning continuous development process that enable feedback of data from the later phases of the lifecycle to the former ones. Besides, reduction of CO₂ emissions during the lifetime of the system requires minimizing the power consumption at component, module and system levels while in operation by using low-power hardware and software technologies.

Moreover, eco-design has to consider re-use in a second life application, and the recovery of components and materials for recycling. Note that increased integration will cause the borders between components, modules and systems to become blurred: More diverse and complex materials will be used at each level, so that the dismantling of systems into their constituent components at the end of their useful life will become increasingly difficult, requiring significant R&I efforts to identify solutions to achieve circular economy.

Finally, another lever to decrease the overall resource consumption of ECS is at the architectural level. Embedded intelligence for instance can provide computing capabilities to the nodes and devices of the edge of the network (or edge domain) to improve the performance (energy efficiency, latency, etc.), operating cost, and reliability of applications and services. Above all, this new computing paradigm could significantly reduce environmental footprint by the introduction of ultra-low power and efficient computing solutions. There is plenty to explore on the trade-off between performances and power consumption reduction, and on managing complexity (including security, safety, and privacy) for embedded architectures to be used in different applications areas, which will spread the use of edge computing and artificial intelligence and their contribution to European sustainability.

Healthier life

The critical role that smart components, modules and systems can play for the world’s security and health was demonstrated during the Covid-19 pandemic. Key topics here range from an acceleration in the analysis of DNA samples, the availability of automated medical support and diagnosis tools, to tracking systems for tracing and controlling the spread of the disease, as well as the recourse to robots in several hazardous situations, from disinfecting airplanes and hospital rooms, to delivering medication to isolated patients.

Even outside times of crises, advances in ECS are playing a key role towards enabling a healthier life for all citizens. The Internet of Things (IoT) is one of the main technologies enabled by smart components, modules and systems, and ongoing advancements in IoT bring more smartness to people’s health and well-being via e-health, m-health, implants, ingestibles, wearables, personalised medicine, inclusion of people with a disability, etc. This trend is further accelerated by many AI-enabled positive breakthroughs which can be seen on the horizon.

The potential of these technologies is enhanced by their integration into complex systems-of-systems, relying on ubiquitous, wideband and dependable connectivity, improving medical practices and services for patients and healthcare professionals. Connected devices can allow remote monitoring and diagnosis and more efficient means of treatment. Access to healthcare for rural populations will also improve.

Smarter, more efficient society

AI and edge computing have become core technologies for the digital transformation. AI will allow to analyse data on the level of cognitive reasoning to take decisions locally at the edge (embedded AI), transforming the IoT into the Artificial Intelligence of Things (AIoT). Likewise, control and automation tasks, which are traditionally carried out on centralised computer platforms, will be shifted to distributed computing devices, making use of decentralised control algorithms.

Embedded cyber-physical systems (ECPS), or IoT systems, provide data processing and intelligence on the site/edge, while improving security and privacy, and completely changing the way we manage everyday activities. ECPS also play a critical role in modern digitalisation solutions, quickly becoming nodes in distributed infrastructures supporting systems-of-systems (SoSs) for monitoring, controlling and orchestrating supply chains, manufacturing lines, organisation’s internal processes, marketing and sales, and consumer products.

Moreover, digitalisation platforms exploit embedded software flexibility and ECPS features to automate their remote management and control through continuous engineering across their entire lifecycle (e.g. provisioning, bug identification, firmware and software updates, and configuration management).

Ongoing advancements in IoT systems will drive the further digitalisation of society, by bringing more smartness to human activities, like smart cities, smart transportation, smart grids, smart manufacturing, and pull the development of cyber physical systems and embedded systems-of-systems (SoS). A clear example is the introduction of autonomous vehicles, which will become components in the complex logistics systems of cities, countries, and regions. SoS-related technologies will be key to providing efficient utilisation of autonomous vehicle assets, also offering timely delivery of goods and personnel. Another example is the integration infrastructures adopted in production, in order to meet customer demands locally. Here, the interoperability of SoS technologies across domains is an essential capability.

This evolution will in turn put high demands on the availability and reliability of high-speed, secure, low or guaranteed latency connectivity.

Another important trend is the emergence of open-source components which become the core building blocks of application software in many innovative domains¹⁰. Developers are being provided with an ever-growing selection of off-the-shelf possibilities, which they can use for assembling their products faster and more efficiently, where efficiency goes hand in hand with affordability and sustainability.

Privacy, Safety and Security

The efficiency and flexibility of embedded software, in conjunction with the hardware capabilities of ECS, allow to move various processing functions to local devices, such as voice and environment recognition, allowing for privacy preserving functionalities. AI also increase the capabilities to detect intrusions, thus reinforcing the protection of privacy.

Furthermore, the ever-improving detection capabilities of cameras and other long-range sensors (radar, lidar, etc…) combined with the development of AI at the edge is opening unprecedented opportunities for many safety and security-related applications that currently rely on human involvement, such as automated driving, security and surveillance and process monitoring.

Connected functionalities will extend the control and automation of a single system (e.g. a truck) to a network of systems (e.g. a truck platoon), resulting in networked control of a cyber-physical system. The benefit of this is generally better performance and safety.

As already noted regarding the support for a smarter, more efficient society, the technical trends underlying the promises for higher privacy, safety and security demand the availability of ever better-performing connectivity networks. As an example, automated driving requires ultra-high reliability, extremely low latency and high throughput connectivity solutions. Advanced edge solutions that will integrate AI/ML schemes over secure links will also be of paramount importance. Advanced connectivity is also a key enabler for disaster relief and prevention systems.

Finally, one cannot ignore that the ever-increasing importance of ECS-based systems in our daily lives raise concerns regarding trustworthiness, privacy, safety and cybersecurity. Indeed, a degraded behaviour of cyber-physical systems or an incorrect integration among them, would affect vital properties and could cause serious damage. Shortcomings in those dimensions might even outweigh the societal and individual benefits perceived by users, thus lowering trust in, and acceptance of, new technologies. Ensuring high standards on safety, security, and reliability at affordable efforts and cost, require continuous R&I efforts on methods and tools for ECS architecture and design:

• Applying “quality by design” approaches for future ECS-based systems.

• Providing methodology, modelling and tool support to ensure end-to-end trustworthiness of new designs. This includes balancing trade-offs of quality aspects and ensuring tool-supported verification and validation (V&V) at the ECS level, providing methodology, modelling and tool support to validate safety of AI-based systems.

Connected society / social inclusion

The further integration of “smart everything” into “ubiquitous smart environments” will introduce large and very complex systems of systems with complex physical interactions. In this context the technology competence and innovation in the field of embedded and cyber-physical based SoS will be a critical asset.

ICT technologies have long been recognised as promoting and facilitating social inclusion, as well as digital inclusion (i.e. the ability of people to use technology). These aspects span dimensions as diverse as disaster relief, food security and the environment, as well as citizenship, community cohesion, self-expression and equality. One illustration is the use of AI to enhance conversational interfaces, improving the human-machine interface with reliable understanding of natural language.

As mentioned earlier, investing in the Research and Innovation topics described in this document will not only translate into a more competitive and sovereign European ECS value chain, but it will also boost European industrial competitiveness across all sectors.

Electronic components and systems, by their inherent nature, are the result of interdisciplinary research and engineering. These require competencies in diverse technology domains, including process technology, equipment, materials and manufacturing, electronics, and telecommunications, as well as cross-sectional technologies such as edge computing, artificial intelligence, high-speed connectivity, and cybersecurity.

As a result, ECS research needs to be interdisciplinary to benefit from the multiple available sources of innovation, as well as research-intensive and market-oriented. This will ensure forthcoming ECS innovations will be of strategic value for Europe and boost its industrial competitiveness in all its value chains, and help building the strong industrial base essential for European strategic autonomy.

With the Chips Act, the KDT JU has transited to the Chips JU, with a mandate extended to capacity building activities and related research and innovation activities of four operational objectives of the Chips for Europe Initiative, as set out in the Chips Act article 4:

1. building up advanced design capacities for integrated semiconductor technologies;

2. enhancing existing and developing new advanced pilot lines across the Union to enable development and deployment of cutting-edge semiconductor technologies and next-generation semiconductor technologies;

3. building advanced technology and engineering capacities for accelerating the innovative development of cutting-edge quantum chips and associated semiconductor technologies;

4. establishing a network of competence centres across the Union by enhancing existing or creating new facilities.

These objectives translated in particular into the following additional activities for the JU:

• The development of new capabilities to design, prototype and test innovative chips through pilot lines on semiconductor technologies, with the close collaboration of European RTOs and industrial vertical sectors.

• The establishment of competence centres, which will address the lack of skills that is affecting the European labour market, trying to provide training support for future professionals in the whole ECS domain, consolidating and strengthening the rich knowledge base required by interdisciplinarity.

• The setting up of a new Virtual Design Platform and specific funding instruments which will provide support to the rich, diverse and multidisciplinary ecosystem of European SMEs and start-ups, facilitating investments in research, development, and production and simplifying the process of bringing innovation from “the lab to the fab”.

This SRIA is the reference document for all research and innovation activities of both the former (under KDT) and these new Chips JU activities. This extension reflects the intrinsic interdisciplinarity of the SRIA and further strengthens it from different perspectives.

All the new initiatives introduced by the Chips Act have been conceived to boost European competitivity in the ECS market and ECS-based application domains, guiding investments and resources towards strategic areas of semiconductor technology that are most critical for the European industry's competitiveness. This SRIA contributes to the identification of these critical areas and of the associated challenges that will characterise their development in the next ten years. The role of the SRIA is fundamental to identify the key starting points for RD&I and to setup multi-annual synergies with the pilot lines that will focus on more mature prototyping. The SRIA will also potentially provide the elements for the “first-of-a-kind facilities” envisioned by Pillar 2: the synergies between these three steps represent the key strategy to increase European capacity building, to boost competitiveness, and to anticipate, prevent and effectively manage future crises.

The benefits for European strategic autonomy of the development of innovative ECS technologies focused on security, safety, reliability, dependability and privacy was discussed in the section “strategic advantages for the EU”. European technology-based, secure, safe and reliable ECS, combined with European AI solutions, are critical to securing global leadership and strategic autonomy in key areas such as ICT and to ensure compatibility with EU values.

These innovative technologies will simplify the implementation of the European Strategy for Data^11,12, and ensure security, privacy-by-design and strategic autonomy all along the industrial and digital value chains.

Threats to Europe’s strategic autonomy are to be found in the microelectronics value chain, and then downstream in the component user segments of the electronics industry. In this context, the Major Challenges identified by the ECS SRIA will help develop innovations in secure, safe and reliable ECS technologies for creating EU-based/-made solutions in the key European application domains of:

• Aerospace, defence, security.

• Automotive, transportation.

• Machinery, robotics, electrical equipment, energy.

• Communications, computing.

• Healthcare and well-being, etc.

The Chips Act aims at consolidating and strengthening European strategic autonomy, extending and boosting the KDT with a new specific focus on the upstream of the ECS value chain. Reducing the dependency on non-European suppliers and avoiding future shortages represent the main steps towards strategic autonomy: reaching the independence on non-European suppliers for critical ECS is crucial to ensure European industries and key application domains to have a stable supply of semiconductors, even during future global disruptions or geopolitical tensions. Technological leadership and strategic autonomy are the primary ingredients required to:

• Control ECS manufacturing to produce solutions designed to meet stringent security requirements; an essential aspect for maintaining secure digital infrastructures and key applications (e.g. automotive, defence, energy, etc.).

• Ensure resilient supply of semiconductors produced in Europe to support the resilience of critical infrastructure, including energy, transportation, and healthcare systems, which rely on advanced chips.

• Achieve a greater control over the technology infrastructure that underpins the European digital economy, ensuring that critical data and systems remain under European jurisdiction.

• Enhance Europe's economic competitiveness, leading to the creation of high-tech jobs, stimulating innovation, fostering economic growth, and making Europe less dependent on external economic forces.

European strategic autonomy will also require the sustainability and resilience of the entire ECS value chain since the development of innovative technologies focused on sustainability and the Green Deal will support ambitions to achieve a green, resilient and competitive Europe.

Moreover, the serious effects of climate change that we are experiencing daily and the current geo-political situation, which highlights our dependency on non-European fossil energy providers, further reinforce the need for Europe to accelerate its transition to climate neutrality by 2050.

This challenge must be perceived as an opportunity to create a new environment for boosting innovative aspects of technology and business models through achieving the following:

• Relying extensively on ECS-based technologies and digitalisation as key factors for lowering our global energy footprint at all levels of the economy, and by placing sustainability at the heart of combined digital and green transitions.

• Positioning the European players in hardware as front-runners in sustainability to secure a wider market so they can become world leaders. This will need European companies to consider the circular economy, new market positioning (by turning small market shares into specialisation areas), the environmental impact of global manufacturing, etc.

• Establishing this carbon-neutrality challenge, based on a close link between the digital and green transitions at the core of future funded collaborative research and innovation in ECS. This will help ensure a positive impact for each stage of the value chain, and achieve carbon neutrality right down to the final application/digital service.

This new context is required to fight and reduce the effects of climate change.

As developed earlier in the section “Sustainability” of “Technology-enabled societal benefits”, advances in ECS technologies are both a major enabler of the Green Deal for all ECS-based application fields, and a direct contributor through their significant impact on power and resource consumption of ECS manufacturing and use.

Furthermore, the strategic autonomy introduced by the Chips Act contributes to economic sustainability and security, through a reduced dependency on non-European suppliers, an increased production capacity, more competitive manufacturing processes and products, a resilient supply chain, circular economy promotion, etc.

ECS must have intelligence and autonomy capabilities to control their complexity more efficiently and more cost-effectively. This will help provide novel advanced functionalities and services, limit human presence to only where it is strictly required, improve the efficiency of vertical applications, etc. Intelligence and autonomy are also required for the role of ECS in the application domains, representing an important factor for the sustainability and resilience of the value chains: an ECS-based system that provides intelligent energy management, relying on technologies such as AI, represents a key building block – for example, for smart home and energy applications. Moreover, it also improves the resilience required to ensure optimal energy consumption in critical conditions and contributes to the sustainability of the value chain associated with vertical applications, since it reduces operational costs and environmental impact, improves the quality of service (QoS), return on investment (ROI), etc., thereby strengthening the global competitiveness of European companies and helping to achieve the objectives of the EU’s Green Deal.

With an innovative and strong semiconductor industry Europe can improve its competitiveness in the global AI landscape, and this will contribute attracting AI talent, companies, and research initiative in Europe. Supporting the key focus areas identified in the SRIA will be crucial to consolidate the European future position in the AI market and contribute to the supply chain resilience, supported by a robust semiconductor industry in AI hardware. Boosting the RD&I activities described in Chapter 2.1 of this SRIA will ensure a solid support for all the vertical domains covered by the Application chapters.