High energy costs threaten EU's semiconductor industry, warns Taoiseach Micheál Martin

Taoiseach Micheál Martin warned European Commission president Ursula von der Leyen that Europe risks losing its semiconductor chipmakers due to high energy costs. He urged the EU to help chip producers, such as Intel, to stay economically competitive in Europe or face investment pause and plant relocation. Martin appealed for interim measures to address the issue and keep chip manufacturers in mind as the EU pivots towards environmentally-friendly energy sources.

Taoiseach Micheál Martin has warned European Commission president Ursula von der Leyen that Europe risks losing its semiconductor chipmakers due to high energy costs. In a letter sent in March, Martin urged the EU to help chip producers, such as Intel, to stay economically competitive in Europe or face investment pause and plant relocation [1].

The Government's letter emphasized the need for interim measures to address the issue, as energy prices in the EU remain relatively high compared to competing economies [1]. This is particularly concerning for semiconductor manufacturers, which use a significant amount of energy to produce chips. Companies like Intel have been reporting very high electricity costs in Ireland, making it difficult for them to remain competitive globally [1].

Von der Leyen responded in June, acknowledging the need to address Europe's energy challenges to boost the semiconductor industry. She highlighted that new EU legislation would help energy-intensive industries make the switch from fossil fuels to clean energy, while also fostering innovation and simplifying regulations [1].

The Government is also hoping to lure a company, such as Nvidia or another big player, to build an advanced chip fabrication plant in Ireland as part of a new strategy on semiconductors [1]. However, the high energy costs pose a significant challenge to this plan.

In a separate development, the U.S. government has agreed to fund Intel Corp. with $5.7 billion to bolster domestic chip production. This move is part of a broader strategy to reduce America's reliance on foreign chipmakers and ensure domestic capabilities in leading-edge logic manufacturing [2]. The deal, which includes a 10% equity stake in Intel, has sparked debate about the role of government in the private sector.

Meanwhile, European energy utility EVN AG has demonstrated resilience in navigating energy market volatility and decarbonization policies. The company's investment in renewables and grid upgrades, along with strategic diversification into non-energy sectors, has strengthened its resilience [3].

These developments highlight the complex challenges faced by the semiconductor industry and the broader energy sector. As Europe and the U.S. pivot towards more environmentally-friendly energy sources, the industry must adapt to higher energy costs and ensure its competitiveness.

References:
[1] https://www.irishtimes.com/politics/2025/09/02/chipmakers-need-help-with-high-energy-costs-taoiseach-told-von-der-leyen/
[2] https://www.webpronews.com/trump-admin-funds-intel-5-7b-takes-10-stake-for-us-chip-production/
[3] https://www.ainvest.com/news/evn-ag-strategic-resilience-growth-energy-transition-challenges-2508/