December Newsletter
CODE Newsletter – Christmas edition!
Welcome to the final CODE Newsletter of 2025! As the year wraps up and we all drift (or sprint) toward the holidays, we’re here to make sure your Christmas break comes with just the right amount of geopolitical news.
Our team working on the Chips Diplomacy Support Initiative has just released a brand-new policy report unpacking the state and future of Europe’s chips strategy. You’ll find a summary below, right before our traditional holiday gift to you: a rich reading list from your CODE crew exploring the intersections of technology and power.
Europe’s Chip Dilemma: Autonomy or Indispensability?
Europe’s semiconductor debate has entered a decisive phase. What was once framed as a matter of competitiveness is now openly discussed as a question of state power and vulnerability. The Ukraine war, U.S.–China tech controls, and China’s growing leverage over critical raw materials have exposed how deeply Europe’s economic model rests on fragile technological dependencies.
The new CHIPDIPLO policy paper cuts through the rhetoric that has surrounded the European Chips Act since 2022. At its core is a blunt diagnosis: for the EU, full semiconductor autonomy is neither fiscally credible nor strategically stable. Rebuilding the entire global chip value chain inside Europe—from mining and chemicals to advanced logic and packaging—would require permanent public mobilisation on a scale comparable to wartime economies. Industry and policy specialists consulted for the study overwhelmingly view this trajectory as prohibitively expensive, distortionary, and exposed to retaliation from both allies and rivals.
Instead, the paper documents a growing convergence around a different strategic lodestar: Allied Autonomy with European Indispensability. The logic is not to replicate the whole chips supply chain in Europe, but to dominate what matters most. Europe already commands several of the world’s most critical semiconductor choke points—above all in advanced lithography, equipment manufacturing, and applied research. The most available strategy is to deepen those advantages while seeding new ones in photonics, quantum technologies, and advanced industrial chips.
Crucially, indispensability is not pursued alone. In the preferred 2035 scenario emerging from a Delphi-style exercise with 50 experts, Europe embeds these choke points inside a trusted production and innovation coalition with the United States, Japan, South Korea, Taiwan, India and Southeast Asia, while jointly shifting the most sensitive bottlenecks out of China. For the European industry, decoupling is not an option; re-engineering interdependencies is the aim.
Yet the paper is striking in its sobriety. Even this alliance-based strategy offers only limited protection against extreme geopolitical shocks—from a Taiwan conflict to coordinated export embargoes. Participants are deeply skeptical that any configuration of the semiconductor value chain can fully insure Europe against systemic crisis. Even indispensability buys leverage but not immunity.
Indispensability, it argues, will not be built primarily through headline industrial spending, but through structural reform: abundant and affordable energy, fast permitting, deep capital markets, aggressive global talent attraction, and faster translation from lab to fab. Without these conditions, Europe’s existing technological choke points risk gradual erosion.
The paper ultimately reframes Europe’s semiconductor challenge in post-sovereign terms. This is no longer a choice between dependence and independence, but between managed leverage and unmanaged vulnerability in a world where technological interdependence is increasingly weaponised.
A Detour from Chips to Power
Of course, chips are only one window into the shifting architecture of global power. If you’re hoping to disconnect from emails but not from thinking, we’ve assembled a set of winter-break recommendations touching on history, strategy, institutions, and the messy ways technology recasts all three.
Here’s what the CODE team has been reading, watching, and arguing about lately:
The Once and Future World Order: Why Global Civilisation Will Survive the Decline of the West, by Amitav Acharya (Book)
This book brings us back to the past, from ancient Sumer to medieval empires and the contemporary era, to explore what “world order” has meant throughout history. Acharya argues that the decline of Western hegemony opens the way for a more pluralistic, multipolar world—one that is not only desirable but historically normal.
How Progress Ends: Technology, Innovation, and the Fate of Nations, by Carl Benedikt Frey (Book)
Frey explores why technological progress can stagnate and what this means for global economies. A must-read for understanding the limits of innovation and the forces that drive—or hinder—national competitiveness.
Focus: The ASML Way – Inside the Power Struggle over the Most Complex Machine on Earth, by Marc Hijink (Book)
An insider’s look at ASML, the Dutch semiconductor giant, revealing the strategic, technological, and geopolitical battles behind the world’s most advanced chipmaking machines. Essential for anyone interested in tech, industry, and innovation.
Apple in China: The Capture of the World’s Greatest Company, by Patrick McGee (Book)
A detailed account of Apple’s rise and operations in China, highlighting the interplay between multinational firms, government policy, and global supply chains. Offers valuable lessons on strategy, adaptation, and global business geopolitics.
Escape from Rome: The Failure of Empire and the Road to Prosperity, by Walter Scheidel (Book)
Scheidel analyszs how the collapse of the Roman Empire set the stage for European economic growth. A fascinating exploration of history, institutions, and the long-term drivers of prosperity.
Gods Among Men: A History of the Rich in the West, by Guido Alfani (Book)
This book traces the lives and influence of the wealthy elite throughout Western history. A compelling look at how wealth has shaped politics, culture, and economic development over centuries.
The Origins of Efficiency, by Brian Potter (Book)
Efficiency drives civilization progress, but where does it come from? In The Origins of Efficiency, Brian Potter argues that gains in production efficiency—doing more with less time, labor, and resources—underlie many pivotal historical changes. The book explains today’s material abundance and how efficiency can advance housing, medicine, and education.
Routledge Handbook of the Extractive Industries and Sustainable Development, edited by Natalia Yakovleva and Edmund Nickless (Handbook)
The book covers the critical raw materials industry across the entire value chain, including economic, technological, and environmental aspects, as well as recycling and substitution.
Should the US Sell Hopper Chips to China? Assessing the impacts of exporting the H200 or H100 AI chips, By Saif Khan, Tao Burga, Tim Fist, and Georgia Adamson, Institute for Progress (Report)
The report examines the implications of the Trump administration’s decision to allow exports of NVIDIA’s H200 AI chips to China. The report concludes that this policy weakens the US export-control strategy, narrows America’s AI compute advantage, and adds to China’s total AI capacity without slowing domestic chip development.
Deploying Critical Minerals Price Support Mechanisms, video on demand by CSIS Critical Minerals Security Program (Video)
In this video, analysts, government officials, industry stakeholders, and venture capitalists discuss available options to mitigate the price volatility of critical raw materials, including aggregated demand, price floors, and public-private partnerships.
Warm wishes for nice holidays from the CODE team. See you in 2026!