Europe's chip ambitions won't break dependence on US cloud and software, says Forrester

Forrester's latest analysis suggests Europe's ambitious drive for technological independence, particularly in semiconductors, may fall short of achieving true digital sovereignty. While the continent is investing heavily in domestic chip manufacturing, this alone will not dismantle its reliance on US cloud giants and software providers. The report highlights that the global race for tech supremacy has largely been won by the United States and China, leaving other regions to strategically manage their dependencies. The "Tech Sovereignty Index" from Forrester indicates a significant lead for the US and China, with European economies showing only modest projected growth in tech sovereignty scores by 2030. Despite substantial government spending and plans for new chip fabs under initiatives like the European Chips Act, Europe's share in global chip design remains minimal, and it lacks major homegrown semiconductor companies comparable to US counterparts. This dependence extends to the digital infrastructure layer, where US hyperscalers like AWS, Microsoft Azure, and Google Cloud dominate the European market, and factors such as energy costs and regulatory hurdles hinder datacenter expansion. Consequently, even with increased chip production, Europe is unlikely to achieve its goal of producing a fifth of the world's semiconductors by 2030, with Forrester forecasting a figure closer to 11.3 percent. Furthermore, the analyst questions the efficacy of "sovereign cloud" offerings from US hyperscalers, arguing that ultimate control and ownership remain with their American parent companies, irrespective of datacenter location. This reality compels nations, including those in Europe, to re-evaluate their pursuit of complete self-sufficiency, instead emphasizing strategic management of unavoidable dependencies through international alliances and open technology adoption.