Photonics21 Welcomes Chips Act 2.0 Inclusion of Photonics – and Calls for a Dedicated European Photonics Partnership

Photonics21 welcomes the European Commission's proposal to explicitly include photonics and integrated photonics within the proposed Chips Act 2.0. This is an important strategic recognition that photonic technologies are indispensable for strengthening Europe's semiconductor ecosystem and for delivering the objectives of the Union's digital, industrial, security and defence agendas.

Photonic technologies are already essential within the equipment used for electronic semiconductor chip manufacturing processes. Future semiconductor competitiveness will increasingly depend not only on transistor scaling, but also on bandwidth, energy efficiency, advanced packaging and system integration – all areas in which the co-integration of photonic components and electronic chips will provide decisive advantages. Integrated photonic chips are rapidly becoming a critical enabling technology for artificial intelligence, high-performance computing, quantum technologies, secure communications, advanced sensing and next-generation manufacturing. The inclusion of photonics and integrated photonics in the Chips Act 2.0 is therefore fully aligned with Europe's objectives of strengthening technological sovereignty, industrial resilience and global competitiveness.

Photonics21 recommends a two-track funding architecture for Photonics in the next MFF:

1. Semiconductor-related photonics and integrated photonics should be fully and explicitly embedded within Chips JU 2.0, benefiting from its funding instruments, infrastructure and governance alongside other semiconductor technologies. This includes:
   1. Photonic technologies used for the manufacture of electronic semiconductor chips (e.g. lithography tools; metrology tools)
   2. Combinations of photonic components and electronic chips (e.g. co-packaged optics; (hollow core) optical fibers)
   3. Integrated photonic chips
2. The broader photonics ecosystem spanning biophotonics and medical diagnostics, (free space) optical communications, laser-based manufacturing and machine vision, agrifood and environmental sensing, mobility (e.g. LIDAR), and security/defence and quantum communications, computing and sensing, requires a separate, dedicated, ring-fenced budget outside the Chips Act, delivered through an MoU-based Partnership under Horizon Europe and the European Competitiveness Fund.

A complementary funding architecture for European photonics is needed

The Chips Act rightly addresses the semiconductor dimension of photonics. However, photonics is a cross-cutting technology supporting innovation across healthcare, advanced manufacturing, telecommunications, mobility, agriculture, climate technologies, security, defence and quantum technologies. Photonics is one of the few deep-tech sectors where Europe currently excels and is vital to 20% of the EU economy.

Without a dedicated European framework, photonics investments would become fragmented across multiple sectoral programmes with different priorities, governance structures and implementation timelines. This would weaken strategic coordination, reduce critical mass and make it more difficult to maintain coherent technology roadmaps, industrial deployment and long-term investment. Rather than being recognised as a strategic technology in its own right, photonics would risk becoming merely an enabling component within individual policy initiatives.

This is precisely the type of fragmentation identified in the Draghi Report as a structural weakness of Europe's innovation system. Europe's competitiveness depends not only on investing more, but on investing strategically and coherently across complete industrial value chains. The importance of this was seen from the loss of Europe’s position in the semiconductor domain, which the Chips Act is now working to recover.

Maintaining Europe's leadership in photonics therefore requires maintaining leadership across the wider photonics ecosystem, not only integrated photonics. The technologies, manufacturing capabilities, materials, design platforms, pilot lines, packaging technologies and specialised SMEs that enable future photonic integrated circuits are developed through investments across the entire photonics value chain.

Photonics21 therefore calls for a dedicated, ring-fenced budget for photonics research and innovation outside the Chips Act, ensuring sustained support from research and technology development through industrial deployment. This investment should be delivered through a MoU-based Partnership under Horizon Europe and the European Competitiveness Fund.

A strong Chips Joint Undertaking and a strong Photonics Partnership are not alternative policy instruments – they are complementary. Together they would provide Europe with the coordinated investment framework required to strengthen semiconductor leadership while sustaining the broader photonics ecosystem from which future innovations will emerge.

Governance and stakeholder representation

The successful implementation of Chips Act 2.0 requires the full participation of Europe's photonics community.

Photonics21 therefore recommends:

1. Formal representation of Photonics21 on the Chips Joint Undertaking Private Members Board, ensuring that the European photonics ecosystem contributes directly to strategic decision-making.
2. Systematic involvement of photonics experts in the development of the Electronic Components and Systems Strategic Research and Innovation Agenda, work programmes, proposal evaluations and project monitoring.
3. Alignment between the Photonics21 Strategic Research and Innovation Agenda, its Grand Challenges and the Chips Joint Undertaking work programme, ensuring coherence across European investments.

Grand Challenges: an investment pipeline for Europe

Photonics21 developed a portfolio of eight Grand Challenge Projects – large-scale, pan-European initiatives that are ready for implementation. Together they provide a concrete investment pipeline capable of translating European research excellence into industrial leadership.

Each Grand Challenge represents between €250 million and €900 million of public investment and is expected to leverage at least four times that amount in private investment, creating an overall programme leverage of €6 to €8 billion in industrial R&I.

The portfolio itself demonstrates why Europe requires a complementary funding architecture. Several of the Grand Challenges naturally fit within the scope of the Chips Joint Undertaking by accelerating the development and industrial deployment of electronic chips, photonic chips or the co-integration of photonic components and electronic chips. Others address strategic application areas – including healthcare, advanced manufacturing, and agriculture – that lie beyond the scope of the Chips Act but are equally important for Europe's competitiveness and resilience.

The Grand Challenges therefore provide an implementation-ready blueprint for a coordinated European investment strategy, combining the Chips Joint Undertaking with a dedicated Photonics Partnership to maximise industrial impact across the entire photonics ecosystem.