The size of subsidies under the EU Chips Act, which aims to tempt the world's top chipmakers to build factories in the bloc and double its share of global output to 20% by 2030, lags the $52 billion CHIPS for America Act.
Taiwan accounts for more than 60% of global chip production and concerns are growing about heightened tensions between Taipei and Beijing.
But Europe's relatively modest subsidies could put a brake on its ambition, said Richard Windsor of research company Radio Free Mobile.
GOOD STARTThe EU Chips Act is a good start given the EU has little choice but to join the subsidy race, but the bloc should play to its chipmaking strengths, said Christopher Cytera, research fellow at the Centre for European Policy Analysis.
Catching up on the chips race is more than just building factories and the Chips Act acknowledges this with its focus on developing skilled labour for the future, said Anielle Guedes, senior research analyst at IDC Technologies.