The initiative attempts to mobilise €100bn in private investments and create 250,000 jobs.
In an attempt to boost electronics design and manufacturing capabilities, the European Commission launched a €5bn private-public partnership called Electronic Components & Systems for European Leadership (ECSEL).
The main aim of this initiative is to create 250,000 jobs in Europe by the year 2020, and help industries launch new pilot projects.
This initiative will bring together manufacturers, technology companies, chip designers, software developers, researchers and universities that are at the early stages of product and service development, as well help research projects closer to market.
European Commission VP Neelie Kroes said: "We need to join up our efforts if we are to win back and defend a leading position for Europe.
"I am happy that this partnership is now active - it shows that the EU and Member States can work together quickly when there is a clear case for action. The regulation to set it up was approved in less than a year!"
The EU funding will be given through an innovation and research programme, Horizon 2020.
The first call for proposals worth €270m will include technology developments in electronic chips, development of smart systems and their integration into application for efficient transport, chips for improvement of privacy of citizens and sustainable energy generation.
Earlier this year the Electronics Leaders Group (ELG) unveiled its plan that was targeted towards maintaining Europe's position as one of the best places for investment.