Research labs in Europe are set to receive €2.5 billion ($2.72 billion) in funding under the European Chips Act to pursue the development of advanced semiconductors.

The funding will be used to set up a pilot line, dubbed NanoIC, to develop and test new components including sub-2nm chips. Belgium-based R&D organization Imec will host and lead the project.

Other participating research labs include CEA-Leti of France, Fraunhofer of Germany, VTT of Finland, CSSNT of Romania, and the Tyndall Institute of Ireland.

The total financial package will consist of public and private contributions. This includes approximately €1.4bn in public investments from European Union (EU)-funded programs such as Horizon Europe, Digital Europe, and the Chips Joint Undertaking, and an additional €1.1bn from private companies, including ASML, which makes the lithography machines needed to build advanced cjips.

In a statement, Imec said the NanoIC pilot line will support a “diversity of industries in Europe, including automotive, telecommunications, health, and more, to develop future-proof products that leverage the latest chip innovations.”

Luc Van den hove, president and CEO of Imec, added: “The support from EU, the Flemish government, and industry partners will enable us to not only retain our leadership position, but also pivot closer to market demands. The investment will allow us to double volumes and learning speed, accelerating our innovation pace, strengthening the European chip ecosystem, and driving economic growth in Europe.”

Approved in April 2023, the €43 billion ($47bn) EU Chips Act was established with the intention of doubling the EU’s global market share in semiconductors from 10 percent to at least 20 percent by 2030.

Originally set to focus only on high-end chips, it has since expanded to include older chips and research and design facilities.