Europe risks losing its leading position in photonic chip technology unless swift and targeted action is taken, according to senior figures from the continent's integrated photonics sector.
A group of eight European chief executives, supported by industry body PhotonDelta and drawing on input from more than 80 photonic chip organisations, has urged the European Union to strengthen support for the sector as global competition intensifies. The group is calling for greater priority for photonic chips in the forthcoming revision of the EU Chips Act, alongside improved investment conditions and targeted public‑private funding.
Photonic chips, also known as photonic integrated circuits, use light rather than electricity to process information. The technology offers high‑speed operation, reduced energy consumption and lower heat generation, making it increasingly important for applications ranging from data centres and artificial intelligence to healthcare, mobility and agriculture.
Europe has built a strong international position in photonic chips through sustained research and early investment. The industry is now moving rapidly towards commercialisation, with the global market for integrated photonics forecast to grow by more than 350 per cent over the next five years, reaching an estimated value of around €65 billion by 2031.
Industry leaders warn, however, that increased investment in the United States and Asia is eroding Europe's advantage. With the revision of the EU Chips Act approaching, they argue that urgent action is needed to protect Europe's technological lead, strengthen strategic autonomy and support long‑term economic growth. Similar warnings were raised in former European Central Bank president Mario Draghi's 2024 report, which cautioned that a lack of investment and decisive policy could lead to a loss of Europe's strategic and economic relevance.
The group notes that Europe has previously fallen behind in emerging technologies, including semiconductor manufacturing in the 1970s and solar energy in the 2000s, after early leadership was overtaken by competitors in Asia and the US. They argue that a similar outcome could occur in photonic chips without focused support.
The 2023 European Chips Act was described as an important first step, particularly through the establishment of a manufacturing pilot line for photonic chips. However, the industry says the initiative did not address the need to scale production and industrialise the technology at pace. As geopolitical tensions increase and supply‑chain security becomes more critical, the CEOs argue that Europe must invest to avoid future dependence on non‑European suppliers.
In a white paper, the group set out several recommendations. These include the creation of a dedicated photonic chip programme within a revised "Chips Act 2.0", featuring subsidies and initiatives tailored to the sector. Proposed measures include coordinated procurement for large projects, closer collaboration between European companies and stronger support for "buy European" strategies.
The industry also calls for targeted investment in open‑access foundries to support industrialisation and scaling, particularly for small and medium‑sized enterprises that cannot invest in their own manufacturing facilities. Strengthening public‑private partnerships is seen as key to closing the gap between academic research and commercial deployment.
In addition, the CEOs highlight the need for a more favourable innovation and investment climate, including simpler regulation, improved access to funding for scale‑ups, and a stronger focus on skills development to retain talent and expertise in Europe.
Eelko Brinkhoff, chief executive of PhotonDelta, said photonic chips are central to Europe's future competitiveness.
"Photonic chips are essential to Europe's broad‑based sustainable, digital and competitive future," he said. "Without targeted investments and strategic recognition, such as the Chips Act 2.0, we risk losing our lead to global competitors. That is why we call on government, industry, and knowledge institutions to join forces."
Johan Feenstra, chief executive of SMART Photonics, said Europe must move beyond pilot projects. "We are busy scaling up manufacturing technology for photonic chips and making this available to all fabless companies," he said. "But to really accelerate, we require concrete action and a strong drive to scale up and industrialise. If we only focus on pilot lines and research, we risk missing the boat."
"Integrated photonics is no longer emerging; it's a critical semiconductor technology in a booming market," said Iñigo Artundo, chief executive of VLC Photonics. He continued, "Europe faces growing challenges as AI drives demand for photonic technologies."
He warned that high‑volume manufacturing, software, testing and packaging capabilities are increasingly moving to the US and Asia.
Photonic chips are seen as a key enabler for next‑generation technologies, including energy‑efficient AI systems, quantum computing, robotics and advanced sensing in food and medical applications
Industry leaders argue that preserving Europe's position in this field is essential not only for competitiveness, but also for the continent's strategic autonomy in critical technologies.