"US controls have curtailed European semiconductor technology sales on China’s huge market, while Beijing’s state support to indigenize the entire global value chain undercuts Europe’s competitiveness. In this report, EU industry and research technology organisations provide detailed input on the achievability, desirability, and effectiveness of four 2029 tech transfer regime scenarios. They provide important clues on how the EU should protect its semiconductor interests." - Joris Teer, Research Analyst at the EUISS, Senior Advisor of CHIPDIPLO and author of this policy paper.
 

"EU Member States have significantly strengthened their ability to manage technology-leakage risks in recent years. Yet the EU remains behind the curve on export controls, too often reacting to initiatives launched by the United States and China. Mere alignment with multilateral control lists is no longer sufficient to safeguard Europe’s technological interests. This note underscores the need for a more proactive approach—one that offers greater predictability for Europe’s innovative actors." - Mathieu Duchâtel, Director of international studies at Institut Montaigne and Director of CHIPDIPLO.

This paper explores four scenarios through 2029:

• Scenario 1. An Extraterritorial Patchwork: Rapid Expansion of US Controls
• Scenario 2. Fortress Europe: A Unified EU Technology Transfer Regime
• Scenario 3. An American, European, and East Asian Coalition of the Willing (CoCom2.0)
• Scenario 4. A US–China Grand Bargain: Relaxation of Technology Transfer Controls

These scenarios were presented to thirteen representatives from ten leading European semiconductor companies and research technology organizations during a workshop held in April 2025. Participants rated each scenario on achievability, effectiveness, and desirability :

• Representatives of the European semiconductor ecosystem foresee a bleak future, in which US decisions continue to shape technology transfer regimes. Scenarios most adverse to EU interests—the rapid expansion of US (unilateral, and extraterritorial) restrictions and a US–China grand bargain—are also seen as the most likely by 2029.
   
• They expect that any regime would at best be “somewhat” effective in curbing China’s military and industrial rise and warned that Europe’s semiconductor sector will remain vulnerable to Chinese retaliation under all scenarios.

Despite this negative outlook, participants found that EU interests would be best served by pushing for a new, predictable multilateral regime, such as Fortress Europe or CoCom2.0, even if it comes with stricter controls on exports to and cooperation with China. Inaction would leave the EU exposed to the other two scenarios, both more damaging to the competitiveness of its semiconductor ecosystem.

Such a framework should be paired with strong defensive measures—protecting coalition markets against China’s state supported semiconductor products—and could offer European actors limited but meaningful leverage in transatlantic negotiations.