EU Chips Act 2.0 Proposal Supports Photonics Industry

The EU Chips Act 2.0 proposal has been officially released, recognizing photonics technology as a structural component of EU policy, according to Odaily. This development is seen as a long-term benefit for the photonics industry. The proposal explicitly supports the development of photonic integrated circuits and related technologies, including enhancing design, prototyping, and industrialization capabilities, expanding EU design capacity in photonics, and supporting pilot production lines and open semiconductor manufacturing facilities. It also focuses on developing and maintaining design libraries and automation tools for photonic integrated circuits. Key policy directions include: 1. Co-packaged optics (CPO/interconnect) for AI data centers, benefiting Sivers (SIVE). 2. Silicon photonics applications for high-bandwidth data center interconnects, benefiting X-FAB (XFAB). 3. Strengthening production technology capabilities for photonic integrated circuits, including co-packaging, heterogeneous integration, and material platforms. 4. The strategic position of SOI wafers in the EU, with Soitec and Siltronic as participants. Serenity, an analyst, believes the act structurally benefits leading European photonics companies, particularly those involved in AI data centers. Related stocks are expected to benefit within 3 to 15 months following the policy release, with the market possibly already reacting in anticipation.