Europe is a key market within the global semiconductor industry, leading in research and development activities, advanced materials, and manufacturing equipment. Semiconductors form an important part of the European economy, with the strength of the European semiconductor industry also playing a significant role in the success of other sectors. A steady supply of chips is good news for industries that depend on semiconductors, with demand in Europe particularly high for industrial automation and automotive applications.
The European Chips Act to boost Europe’s competitiveness and resilienceDemand for semiconductor chips is expected to double by 2030, reflecting the growing importance of such components for European industry and society. To address the challenges of meeting such growth in semiconductor demand, the European Union has set out plans for 43 billion euros of public and private investment as it seeks to increase its market share by value in leading-edge semiconductors to 20 percent in the next decade. With a provisional agreement met in April 2023, the European Chips Act aims to strengthen Europe’s research and technology leadership towards advanced chips, reinforce capacity, develop a deeper understanding of global semiconductor supply chains, as well as address the skills shortage across the industry by attracting and supporting new talent.
Companies across the European semiconductor value chain are set to benefitEuropean players such as Infineon, NXP, STMicroelectronics, and Bosch are recognized as global leaders in semiconductor technologies for automotive and industrial applications – markets that are expected to have some of the highest growth rates in the coming years. Europe is also home to world-leading suppliers of semiconductor equipment, most notably ASML, the largest provider of photolithography systems for the semiconductor industry globally. The company’s machines are involved in the production of advanced chips, used by the likes of Taiwan Semiconductor Manufacturing Company (TSMC) – the world’s largest semiconductor foundry.
Collaboration between European and international semiconductor companies is supported on the ground through alliances such as Silicon Europe, bringing together business clusters of companies involved in and around semiconductor technologies. Examples include Silicon Saxony in Germany, High Tech NL in the Netherlands, and Minalogic in France, clusters that are also home to global players such as GlobalFoundries and Intel.