EU Chips Act

Position paper

EU Chips Act Position paper 1

February 2022

A Chips Act to secure Europe’s relevance

in the global semiconductor industry

Executive summary
Global megatrends that shape the intelligent connected world that we live in are
fueling a significant increase in demand for microchips. Recent chip shortages
highlight the regional interdependencies in the complex global semiconductor
ecosystem. Europe has fallen behind in semiconductor manufacturing, declining from
24% of global production capacity in 2000 to 8% today.

Europe harbors industrial champions in the automotive, industrial electronics and

wireless infrastructure market segments. These companies depend heavily on a mix
of both mature and advanced microchips for the major innovation trends, such as the
transition to electric vehicles and autonomous driving in automotive.

The global semiconductor industry is expected to double to approximately $1 trillion

of annual revenues by the end of the decade. If no action is taken, the European
semiconductor manufacturing capacity will fall below 4%, making it virtually irrelevant
on a global scale and creating a structural threat of insufficient chip supplies to
European industries. To avoid this undesirable scenario, significant public- and
private-sector investments are required.

ASML welcomes and strongly supports the European Commission’s proposal for
a European Chips Act, with the ambition to more than double Europe’s share in
global semiconductor production capacity to 20% by 2030. The Chips Act should
not only focus on chip production. It needs to secure Europe’s relevance in the
global semiconductor ecosystem by increasing the capabilities and performance of
European products and technologies that others rely on.

Europe needs a long-term semiconductor innovation roadmap to guide investment

decisions. To define this roadmap, the European semiconductor alliance should
bring together the manufacturers of semiconductors, their customers in the major
European end-markets, world-leading equipment and materials suppliers, research
and technology organizations and policymakers.

The roadmap should, in any event, support plans to:

1. Maximize the potential of European champions in semiconductor design,
manufacturing equipment and materials, on which the global semiconductor
ecosystem depends
2. Invest in the European semiconductor ecosystem to boost Europe’s strong
industrial positions in global end-markets
3. Invest in both mature and advanced semiconductor production in Europe
4. Attract industry frontrunners to build advanced factories (or ‘fabs’) in Europe
5. Upgrade European semiconductor process technology research facilities

EU Chips Act Position paper 2

 A Chips Act to secure Europe’s relevance
in the global semiconductor industry
1. Global semiconductor industry dynamics Companies in various industries currently experience
The semiconductor industry is growing. Global economic losses due to global chip shortages – a
megatrends – such as an increasing use of the cloud as situation comparable to the oil crisis in 1973. At that time,
a cost-effective way to store vast amounts of data, the oil was taken for granted until it was no longer available.
deployment of the 5G infrastructure, artificial intelligence The same applies to microchips: they were taken as a
applications, compute capability at the intelligent edge, given until 2021, when their availability was suddenly
and virtual and augmented reality – are shaping the threatened. Today’s chip shortages will not disappear
intelligent, connected world that we live in and are fuelling unless long-term, strategic decisions are made by both
a significantly increasing demand for microchips. the semiconductor industry and governments.

With the continued roll-out of the internet of things, the 1.1 E

 urope’s declining role in the global
number of connected devices is expected to increase from semiconductor industry: a call for action
40 billion today to 350 billion by the end of the decade. The global semiconductor industry is based on
This will have a profound impact on computing and data a collaborative system of ‘mutual dependencies’.
storage requirements in data centers and cloud, as well No single region possesses end-to-end capabilities
as in an exponentially increasing number of applications for semiconductor design and manufacturing. The
at the edge, where numerous European companies are semiconductor value chain “relies on the specialized
active. The demand for all types of microchips (both capabilities of different geographic areas”2 (see Figure 2).
mature and advanced1) for these types of applications in all There are interdependencies throughout the global
industry sectors will increase significantly (see Figure 1). value chain, which means that collaboration is the key to
success, provided that you have something to offer that
others need.
Figure 1

Gartner expecting 2022 semi market growth of 9% to $639B in 2025

CAGR 2020-2025 of 8.2%

1000

+8,2%

639 CAGR
Annual SEMI Revenue $B

584
’20-’25
476 466 7.0% Smartphone
422 422 3.9% Personal Computing
8.8% Consumer Electronics
16.3% Automotive
10.5% Industrial Electronics
7.0% Wired & Wireless Infrastructure
9.2% Servers, Datacenters & Storage

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Gartner “Semiconductor Market Forecast: 4Q21 Update Dec24 ’21”

Figure 1: Total
February 4, 2022 semiconductor annual revenues (Gartner 4Q21 Forecast, December 2021). Page 1
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1 In this paper, ‘advanced’ chip technology refers to process technology for 28 nm (nanometers) and
below. ‘Mature’ refers to older generations ≥40 nm.
2 BCG & SIA report, Strengthening the Global Semiconductor Supply Chain, April 2021.

EU Chips Act Position paper 3

 Design
1
Equipment 5
2 3 5 5
4 12 6 7
11 8
Commercialization 9 Materials

10 Manufacturing

Figure 2: Illustration – ‘The global journey of a smartphone application processor’ (BCG SIA report: Strengthening the
Global Semiconductor Supply Chain, April 2021).

Europe has fallen behind in semiconductor manufacturing, the only places in the world where mature chip fabs are
declining from 24% of global production capacity in 2000 currently being built are in eastern Asia. Consequently,
to 8% today (see Figure 3). Nowadays, semiconductor there is a real risk that European industries’ dependence
manufacturing in Europe primarily concerns mature on Asian chip suppliers will further increase in the years
microchip technology, with only a small fraction in to come. Given this dependence on Asian chipmakers,
advanced technologies. policymakers may, from a risk-management perspective,
seek to rebalance production capacity throughout the
Over the past decade, investments in new chip production world (e.g., by on-shoring chip production to Europe).
facilities were mostly made in Asia (see Figure 4), and

100
Others1

80 China (mainland)

60 Taiwan

40 South Korea

Japan
20
Europe
US
0
1990 1995 2000 2005 2010 2015 2020E 2025F 2030F 1990-2020

Global capacity 10Y CAGR (%) +20.2 +9.6 +4.9 +4.6 +11.4
Status quo

forecast
US capacity 10Y CAGR (%) +12.8 +5.0 +4.0 +3.0 +7.2

Note: All values shown in 8” equivalents; excludes capacity below 5 kwpm or less than 8”.
1 Includes Israel, Singapore, and the rest of the world.

Figure 3: Global chip production capacity by region (BCG & SIA, 2020).

EU Chips Act Position paper 4

 ASML system sales per region over the last 10 years Despite the EU having lost ground in chip production
ASML system sales per region over the last 10 years compared to other regions, the continent does
4%
4% harness several critical parts of the semiconductor
value chain. Europe is home to global powerhouses in
Europe chip design, R&D and state-of-the-art semiconductor
Europe manufacturing equipment and materials, as illustrated
Japan
Japan in Figure 2. Europe’s competitiveness in these parts of
North
North America
America the semiconductor value chain will need to be further
South
South Korea
Korea strengthened. Both the public and private sectors will
Taiwan
Taiwan have to invest in this.
China
China 1.3 Investing in the semiconductor industry
ROW
ROW is a long-term attractive play
Automotive, industrial electronics and wired and wireless
infrastructure are strategic European industries with strong
competitive positions on a global scale. These industries
are increasingly dependent on semiconductor technology,
4, 2022 Figure 4: ASML System sales per region over the last with double-digit growth rates both
Page 4
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in automotive and
10 years (Source: ASML) industrial electronics (see Figure 1). Investments in the
Page 4
European semiconductor ecosystem will strengthen the
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global competitiveness of these European industries,

Assuming that the semiconductor industry will double through a front-row seat and/or easier access to
by the end of the decade to approximately $1 trillion, semiconductor technology.
if nothing is done, the European semiconductor
manufacturing capacity will fall below 4% of worldwide In order to succeed in the long term, European policy
production capacity, making it virtually irrelevant on a makers will need to inject significant public funds and
global scale. attract large private investments both from within and
outside the EU, over a substantial time horizon.
1.2 E
 urope needs to increase its relevance
in the global semiconductor ecosystem The necessity for government funding is based on the
The European Commission’s proposal for a European risk that the required European investments in advanced
Chips Act (the “Chips Act”) aims to more than double and mature chip manufacturing will have, what we call,
Europe’s share in global semiconductor production an ‘uneconomical top’. For investments in advanced
capacity to 20% by 2030. ASML welcomes and strongly chip production, that ‘uneconomical top’ relates to the
supports the Chips Act initiative. In light of the global current lack of advanced chip manufacturing experience
semiconductor industry’s fast pace of growth and given on European soil. Setting up an advanced semiconductor
where Europe stands at this point in time, the objective to fab in Europe, means that an advanced semiconductor
more than double Europe’s share in microchip production manufacturing ecosystem will need to be built from the
is very ambitious – some might even say unrealistic – but ground up, which increases the complexity, costs and
our view is this: without healthy ambition, there can be no related investment risks.
progress.
The ‘uneconomical top’ risk for additional European mature
The Chips Act should, however, not only focus on manufacturing expansion relates to the fact that mature
increasing Europe’s chip production capacity: it should aim semiconductors come from fully depreciated fabs in other
to double Europe’s relevance in the global semiconductor parts of the world, whereas the same semiconductors
industry. coming from a greenfield mature fab investment in Europe
would face a factor 2.5 time higher costs. Furthermore, the
Building a European-only, self-sufficient semiconductor build-up of the mature production capacity has historically
value chain would be virtually impossible, given the been based on the re-use of manufacturing equipment
extensive and complex global ecosystem that the industry that would come from dismantled leading edge fabs. That
has built over the last 40 years. But it also wouldn’t be re-use of manufacturing equipment has virtually stopped
necessary, as long as European semiconductor technology since those machines will stay at the original fabs due
stays relevant from an innovation and manufacturing to the high semiconductor demand. This development
capacity point of view. Europe should therefore strengthen results in further increases of the initial investments
its position in the global semiconductor ecosystem by required to build a mature semiconductor fab, which calls
increasing the capabilities and performance of European for a different investment approach by semiconductor
products and technologies that others rely on. manufacturers. Market growth and increased pricing in the

EU Chips Act Position paper 5

mature semiconductor segment will help over time, but 2. M
 ajor European industries depend
do not sufficiently mitigate the increasing short-term risks heavily on microchips
of the very significant initial investments in new fabs. Europe has a strong position in global end-markets such
as automotive, as well as in various industrial markets
We believe that government funding will (partially) such as wired and wireless infrastructure, medical
mitigate these “uneconomical top” risks, which will make technology, lighting and smaller business-to-business
investments in mature and advanced semiconductor fabs niches (see Figure 5). Europe’s strengths in these market
in Europe more attractive. segments is often across the full value chain from chip
design to end product. Dependencies on semiconductors
Currently, semiconductor incentives from European are rapidly growing due to the ‘electrification of energy’
governments for the 2020–2030 period are only 10% and automation (IoT, AI, factory automation). This is also
and 50% of what China and the US, respectively, have illustrated by the expected double-digit semiconductor
promised over the same period3. Europe will need to growth in these markets, outpacing the already fast-
step up its game, and we are glad to see that European growing total semi market (as shown in Figure 1). All
policymakers recognize this4. types of semiconductors – from mature technologies to
advanced – will be required.
Furthermore, it is important to point out that
semiconductor technology is an essential enabler of When we look at the largest buyers of semiconductors in
low-carbon and energy-efficient innovative solutions and Europe, we see that Continental and Bosch are first and
will help reduce society’s environmental footprint – for second (see Figure 6). These two companies are active
example, by optimizing energy usage in transportation, in the automotive and industrial electronics segments.
manufacturing and consumer products and services. Ericsson and Nokia are responsible for a significant chunk
The energy and materials used by semiconductors, both of the European chip demand for wired and wireless
to manufacture and to operate, more than compensate the infrastructure. Major European industrial end users such
energy and material-intensive applications they optimize as Siemens, Philips, Signify and ABB are active in the
or substitute5. The success of the EU Green Deal will thus industrial electronics domain, which covers a wide variety
depend on more significant investment in the European of applications.
semiconductor
Figure 5 ecosystem.

2020 Semiconductor Market by Design (Buying) Region

Europe* the leading region in Automotive and also strong in Industrial
2020 Semi market, in $bn

2020 Semi market, in $bn

36 46 27 171 156 28
7% 4% 5% 9% Rest of Asia
11% 19% 22%
20% China
42% Japan
22% 38%
19% Americas
40% EMEA
25% 5% 7% 51%
29%
7%
35%
43%
36% 30% 16%
28%
13% 7% 3%
3% 3%
Automotive Wired & Compute/Storage Consumer/Mobile Subsystems
Industrial Wireless
Infra

source: Gartner, April 2021 and ASML. EMEA = Europe, MiddleEast & Africa.
Figure 5: Semiconductor markets by region (Gartner, April 2021 and ASML analysis)
February 4, 2022
Company

3  DIGITALEUROPE Recommendations on semiconductor priorities for the EU, November 4, 2021.

4 European Commission, 2021 State of the Union Address by President von der Leyen, September 15, 2021.
5 ESIA, European Semiconductor Industry: A strong contributor to reducing carbon emissions, September 29, 2021

EU Chips Act Position paper 6

 Figure 6

Largest Semi buyers in Europe are in Automotive and Industrial

European buyers of semiconductors, in $bn

European buyers of semiconductors, in $bn
3.5 3.4
Automotive
Industrial
Comm Infra

1.4 1.4 1.3

0.9
0.8 0.8
0.6 0.5

Bosch Continental Ericsson Nokia Siemens Autoliv Philips Signify ABB Valeo

Figure 6: Largest semiconductor buyers in Europe (Gartner, April 2021 and ASML analysis).
Gartner, April 2021, EMEA Semiconductor Spending by Customer, 2020.

February 4, 2022 Page 6

European chipmakers such as NXP, Infineon, 3. H

 ow to strengthen the European Confidential

ST Microelectronics and Robert Bosch have strong semiconductor ecosystem

ties with the three major European end-markets, since Looking at the semiconductor needs for the end-market
they design and supply a significant portion of their segments where Europe has a strong presence
semiconductors. Europe’s semiconductor capital (automotive, industrial electronics and wired and wireless
expenditure (CapEx) is only between 3% and 4% of the infrastructure), we see an increasing need for a mix of
global industry expenditure. In 2019, the top five global mature and advanced chips. Since Europe has a strong
semiconductor CapEx spenders, which are all based industrial base in these end-market segments, it will
outside the EU, accounted for 69% of the total spend, be easier to draw up semiconductor innovation and
or $71.2 billion. Such spending cannot be matched by investment roadmaps for these specific end-market
European chipmakers without state backing6. segments in comparison to others (such as personal
computing, cloud and data storage), where Europe does
Under the assumption that the semiconductor industry will not play a leading role at this point time. It is important to
double from approximately $500 billion/year (2020) to $1 have a strong upstream and downstream connection in the
trillion/year by 2030, the associated CapEx that will have development and implementation of Europe’s long-term
to be spent to realize this growth is roughly $825 billion. In semiconductor manufacturing strategy.
order to keep its share at 8%, Europe will need to invest
8% of $825 billion – $66 billion. To grow its share to 20%, The EU is home to global powerhouses in semiconductor
the European total investment would have to be roughly R&D, semiconductor design, and state-of-the-art
$264 billion. As mentioned above, government funding is semiconductor manufacturing equipment and materials.
needed to (partially) mitigate the “uneconomical top” risks, Europe will need to invest heavily to further bolster these
which will make the required significant investments in current strengths, which will secure the continent’s
mature and advanced semiconductor fabs in Europe more relevance in the global semiconductor ecosystem
attractive. by increasing the reliance of others on European
semiconductor products and technologies. For example,
In the appendices, you will find case studies on the three dedicated European semiconductor ecosystem subsidy
major European end-markets, spelling out the trends, programs, and member states’ tax incentives for
strengths within the European semiconductor ecosystem investments in research & development are very important
and projected semiconductor demand. instruments to help reach that goal.
• Appendix A: The automotive industry requires mature
and advanced chips for the transition to electric vehicles World-class education in science, technology, engineering
and autonomous driving and mathematics (STEM), workforce availability and
• Appendix B: The industrial electronics sector requires flexibility, continued focus on R&D to keep the innovation
mature and advanced chips for a wide variety of pipeline going, as well as effective & efficient local and
sustainable and secure applications national government regulatory support (e.g., to expedite
• Appendix C: The wired and wireless infrastructure fab construction processes) will be crucial success
industry requires mature and advanced chips for 5G/6G factors in Europe’s plans to strengthen the semiconductor
deployment and broadband expansion ecosystem.

6 Roland Berger, How partnerships with non-European providers and the EU’s new initiative can forge a global powerhouse, February 12, 2021.

EU Chips Act Position paper 7

3.1 Involve EU industry to define a roadmap manufacturing ecosystem will have to be built from scratch
for the ‘mature’ semiconductor and will take longer to produce a return on investment.
ecosystem Consequently, foreign investments in advanced fabs in
Investments to strengthen the ecosystem for mature Europe need to be strongly incentivized to mitigate the
semiconductors in Europe should be based on a long- high risks involved. If European policymakers do not
term EU semiconductor strategy (or ‘roadmap’), which provide sufficient incentives, these advanced fabs will
needs to be defined by European end users in automotive, be built elsewhere (such as in Asia and the US), where
industrial electronics and wired and wireless infrastructure, advanced semiconductor manufacturing ecosystems
together with representatives of the various parts of the already exist.
semiconductor value chain in Europe, from semiconductor
manufacturing equipment and materials to chip design and Advanced manufacturing facilities will function as a magnet
manufacturing. for innovation spill-overs and talent attraction across the
Strategic questions that will need to be answered in the entire European ecosystem. We therefore strongly support
roadmap definition process: European funding to prioritize breakthrough technologies
• What are the technology requirements of the products and ‘first-of-a-kind’ facilities9.
of the future (5–10 years from now) in the relevant
end-market segments? 3.3. Upgrade European semiconductor
• What needs to be done in the European mature process technology research facilities
semiconductor ecosystem to meet these technology The EU is home to global powerhouses in semiconductor
requirements? R&D, semiconductor design and state-of-the-art
semiconductor manufacturing equipment and materials.
3.2 Attract industry frontrunners to build European end users and technology providers can use
advanced fabs in Europe so-called extended pilot lines to test, implement and
Europe also needs to invest in the advanced embrace new chip design and manufacturing technologies
semiconductor ecosystem. Europe’s own demand for to go from lab demonstration to production. Europe
advanced semiconductors is expected to increase over is a clear global leader in pre-competitive research on
the coming decade at five times the rate of demand for advanced semiconductor technology, and such pilot lines
other, more mature, semiconductors7. with advanced suppliers’ hubs can help the European
ecosystem to become early adopters of new chip designs
In the past two decades, European chipmakers have and manufacturing technologies, and to jointly drive
effectively stopped investing in advanced manufacturing innovation – in a system integration approach – in all parts
capabilities by outsourcing the production of their of the global value chain.
advanced chip designs to so-called ‘foundries’. Europe
has virtually no manufacturing capacity for chips in Europe has existing pilot lines at research and technology
advanced nodes. organizations (‘RTOs’) such as imec (Belgium), Fraunhofer
(Germany) and CEA-Leti (France). These facilities need
Setting up advanced semiconductor fabs in Europe can substantial upgrades, including a professional design
only be done by teaming up with industry frontrunners enablement infrastructure, to become the proving
such as Intel, Samsung and TSMC. These three companies ground for new advanced system designs in Europe and
are defining plans to significantly increase capital to bring together the industrial base and the existing
expenditure in order to boost global production capacity to semiconductor know-how in the EU.
address the increasing chip demand. TSMC, for instance,
has announced plans to invest more than $107 billion in its The development of new pilot lines for future advanced
foundries between 2020 and 20238, with $40–44 billion in semiconductor technology
2022 alone. Intel and Samsung are also developing plans (e.g., <2 nm nodes, heterogeneous systems integration
for significant capital expenditure. Europe is therefore and advanced packaging) will make significant
presented with a major opportunity to attract some of contributions to the EU innovation roadmap and strengthen
these investments – European policymakers should push European intellectual property in production processes
harder to attract these companies’ production capacity and advanced manufacturing equipment and materials.
investments on European soil.

Investments in advanced fabs in Europe are riskier

than investments in mature fabs because the advanced

7 Kearney, Europe’s urgent need to invest in a leading-edge semiconductor ecosystem, November 10, 2021.
8 Nikkei Asia, Chipmakers’ nightmare: Will shortages give way to a supply glut?, and TSMC press release, January 13, 2022.
9 European Commission, Competition: Commission outlines contribution of competition policy and its review to green and digital transition,
and to a resilient Single Market, November 18, 2021.

EU Chips Act Position paper 8

State-of-the-art semiconductor manufacturing 5. Concluding statement on securing
equipment will have to be sourced from all over the Europe’s relevance in semiconductors
world to maintain the global leadership position of these ASML welcomes and strongly supports the European
European semiconductor pilot lines. Competing efforts Commission’s proposal for the EU Chips Act. In order
are being considered and are already underway in other to succeed, policy makers in the EU will need to
parts of the world, including the United States (e.g., the invest significant public funds and attract large private
National Semiconductor Technology Center initiative) and investments both from within and outside the EU. The
Japan. Europe now has an opportunity to strengthen its Chips Act should not only be about increasing Europe’s
competitive position through considerable investments in chip production capacity: it should aim to secure Europe’s
this domain. relevance in the global semiconductor industry, which is
and will continue to be based on a collaborative ecosystem
4. H
 ow to organize and deliver on of ‘mutual dependencies’.
sustainable EU Chips Act ambitions
Europe needs a long-term semiconductor innovation Building a European-only, self-sufficient semiconductor
roadmap on which investment decisions can be based. value chain would be virtually impossible, given the
We believe that a European semiconductor alliance can extensive and complex global ecosystem that the industry
play an important role in this process. To define the has built over the last 40 years. We will continue to depend
long-term European semiconductor roadmap, such an on non-European semiconductor companies, and others
alliance should bring together the potential manufacturers will continue to depend on EU technology.
of mature and advanced semiconductors, their potential
customers (e.g., automotive, industrial electronics and Through the EU Chips Act, Europe will strengthen its
wired and wireless infrastructure), leaders in equipment position in the global semiconductor ecosystem by
and materials, research and technology organizations supporting the leading capabilities and performance of
and policy makers. For alliance membership, European European products and technologies that others rely
presence and investment should be applied as the guiding on, incentivizing R&D and manufacturing in the EU and
principle, rather than the corporate headquarters location. encouraging the development of new technologies and
innovation.
In the global semiconductor ecosystem, based on mutual
dependencies, a continued open dialogue among the
governments of countries active in the semiconductor
domain remains vital. The European Union has set up
various multilateral initiatives, for example:
• The EU-US Trade & Technology Council (TTC) has
dedicated discussions to semiconductors, and the
European Commission should continue to seek,
preferably in the form of industry roundtables,
semiconductor-specific input ahead of its interactions
with its US counterparts, possibly through the above-
mentioned alliance.
• The EU-China dialogue: the semiconductor industry
in China is a key chip supplier to European industries.
This means that open borders and free trade remain
important agenda items.

In its interactions with foreign countries, the EU should

continue to stress transparency, coordination, a level
playing field and global interdependence as key pillars of
semiconductor policy discussions.

EU Chips Act Position paper 9

Appendix A
The automotive industry requires mature and advanced chips
for the transition to electric vehicles and autonomous driving
The automotive industry is fundamentally changing Looking at Figure 8, traditional car content is mainly
through the electrification of vehicles and the mature, but ongoing node transitions have already moved
autonomization of transport. In the next 15 years, original it toward 28 nm for some components, followed by more
equipment manufacturers will have to switch from advanced nodes to replace the internal combustion engine
producing combustion engine vehicles to electric vehicles with electric motors. Advanced chips are increasingly
on a global scale. This change will generate more demand needed for autonomous driving and on-board computing.
for semiconductors, which will lead to new dynamics in This automotive graph shows a growth of mature and
the field of automotive semiconductors. advanced demand simultaneously.

With brands such as Volkswagen, Daimler, Stellantis, The automotive industry is becoming increasingly assertive
Renault and BMW, Europe has strong automotive giants in its adoption of advanced chips, a trend recently
that are driving this transition. System integrators such confirmed through the collaboration between Tesla and
as Continental, Bosch, Autoliv, Veoneer and Valeo are Samsung on the development of self-driving chips based
key contributors to this transition within the automotive on the 7 nm process10. Players within the automotive
domain. The world’s leading designers and manufacturers industry are exploring the introduction of advanced
of semiconductors to the automotive industry are in semiconductors to manage the increasing number of tasks
Europe, with Infineon and NXP in first and second place, that a car’s electronic control units need to perform.
and with ST Microelectronics
Figure 7 and Bosch also in the top 10
(Figure 7).
Largest Semi companies in Automotive
Top10 supply 59% of total automotive semi demand in 2020
2020 semi revenue in automotive, in $bn
2020 semi revenue in automotive, in $bn
4.2
3.8 Europe
Japan
2.9 US
2.8
2.5

1.6 1.6
1.2
1.0 1.0

Infineon NXP Renesas Texas STM Robert ON DENSO Micron Intel

Instruments Bosch Semiconductor

Figure 8
Figure 7: Largest semiconductor companies in automotive (Gartner, March 2021 and ASML analysis).
Autonomous Driving and Electric Vehicles drive automotive semi market
Source: Gartner Mar’21

Adas requires leading edge while Electric vehicles require power electronics that are produced
February 4, 2022 Page 7
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in mature process nodes, increasingly using special materials like Silicon Carbide
Automotive semi market, in $bn

Automotive semi market, in $bn 110

117 CAGR
103 ’20-’25
96
90 2% ‘Traditional’ automotive
83
23% Electric vehicles
74 Requiring advanced nodes
23% Autonomous driving
64
57
51
39 Mainly mature nodes

Mature partly migrating to advanced nodes

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Figure 8: Automotive
Source: Gartner Jan’22semiconductor market
Automotive semi forecast: Traditional – chip
Electronics demand
includes Powertrain, segments
Safety, for aCluster,
Body, Chassis, Instrument carAftermarket
(Gartner, January 2022 and ASML analysis).
and Infotainment

February 4, 2022 Page 8

10 Reuters, Samsung in talks with Tesla to make next-gen self-driving chips, September 23, 2021. Confidential

EU Chips Act Position paper 10

Appendix B
The industrial electronics sector requires mature and advanced
chips for a wide variety of sustainable and secure applications
Major trends in the industrial electronics sector will Traditionally, this sector has been a stronghold for Europe,
boost the demand for both mature and advanced chips. with industrial champions such as Philips, Siemens,
Firstly, IoT (the internet of things) will trigger the rise ABB, Signify, Airbus and Bosch having established
of connectivity and sensors in devices, leading to an globally competitive positions within this domain. The
explosion of data. Secondly, the transition from carbon- European chipmakers Infineon, STM and NXP are among
based-energy-dominated to electricity-dominated the top 10 world-leading designers and manufacturers
industries will lead to an increased use of power of semiconductors to the industrial electronics industry
electronics. And lastly, next-generation robots and (Figure 9).
autonomous machines, fueled by incremental changes in
machine vision, AI and motion systems, will pave the path
to new applicationFigure
areas9 11.

Largest Semi companies in Industrial

Top10 supply 45% of total Industrial semi demand in 2020
2020 Semi revenue in industrial electronics, in $bn
2020 Semi revenue in industrial electronics, in $bn
4.8

Europe
South Korea
US
3.1
2.8

2.0 2.0
1.7 1.6
1.5 1.4 1.4

Texas Analog Infineon STM Microchip Samsung Intel NXP ON Xilinx

Instruments Devices Semiconductor

Figure 9: Largest semiconductor

Source: Gartner Mar’21 companies
Figure 10in industrial electronics (Gartner, March 2021 and ASML analysis).
February 4, 2022
Industrial Market Page 9
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.
Semi market for industrial electronics, in $bn
Semi market for industrial electronics, in $bn
76
69 Memory
65
Advanced
61
Mature
50

2020 2021 2022 2023 2024

Figure 10: Industrial electronics market development (ASML analysis using third-party research and external consultants).
Source: McKinsey/Omdia 2021. total revenue scaled to fit 4Q21 Gartner Semi Outlook

February 4, 2022

11 ASML study, with third party advisors.

EU Chips Act Position paper 11

Appendix C
The wired and wireless infrastructure industry requires mature and
advanced chips for 5G/6G deployment and broadband expansion

Major trends in the wired and wireless infrastructure sector Europe has several key companies in this ecosystem,
will boost the chip demand for mature as well as advanced such as Nokia, Ericsson, Deutsche Telekom/T-Mobile,
technology. Firstly, 5G/6G deployment will lead to massive Vodafone and production and design companies such
investments in infrastructure, such as an increased number as NXP, ST Microelectronics and Infineon. The wired and
of smaller base station units aiming for better coverage wireless infrastructure industry will require both mature
to support various applications. Secondly, continuous and advanced chips. From a mature perspective, NXP,
growth in data traffic and computing demand for data as the leading supplier for base station antennas, uses
centers, enterprises and homes is driving a growing the technology for RF power chips. In terms of advanced,
demand for high-performance IP routers and switches. Nokia recently announced a shift to a 7 nm design to
As a consequence, a significant infrastructure investment increase the performance and energy savings of its new
is being made on an increased number of smaller base FP5 Processor13.
station units offering better coverage to support various
applications, which pushes an increase in both mature and
advanced chips12.

This sector shows strategic potential for Europe, as

it is a foundational element for the other end-market
segments described above, with the automotive and
industrial electronics segments generating more robust
connectivity needs, particularly as the 5G and 6G rollout
and cloud and edge computing become more essential.
Hence, an investment in chip design and manufacturing
for wired and wireless infrastructure becomes a strategic
choice, supplementing the increase in relevance in other
end-market segments.

12 ASML study, with third party advisors.

13 EE Times Asia, Nokia Focuses on Security, Energy Saving with FP5 Processor, September 27, 2021.

EU Chips Act Position paper 12

 About ASML
ASML is a global leader in advanced manufacturing
equipment for the semiconductor industry. Headquartered
in Veldhoven, the Netherlands, we employ more than
32,000 people (FTE) at 60 locations across the globe.
Key 2021 financial figures include €18.6 billion in global
sales, and a €2.5 billion R&D spend. ASML is a complex
system architect and integrator – our lithography machines
are developed and manufactured together with our supply
chain partners, mainly in Europe. Our most advanced
EUV (extreme ultraviolet) lithography machines consist
of 95% European technology. ASML exists not just as
one company, but as a collaborative innovation network
consisting of large companies, small- and medium-sized
enterprises, and applied research organizations such as
imec in Belgium, CEA-Leti in France, and Fraunhofer in
Germany.

EU Chips Act Position paper 13