Semiconductors from the Netherlands: building blocks of the future

Semiconductors, the building blocks of chips, are everywhere. In your microphone, your smartphone, your computer, and even your washing machine. They make devices smarter, more efficient, and more reliable. As such, they play a role in virtually all of today's societal transitions: from digitization to energy transition. No less than 85% of all chips worldwide are designed, developed, and produced using Dutch semiconductor equipment. Arco Krijgsman, program council member of the Semiconductor Technologies innovation domain at Holland High Tech, says: “From ASML to emerging players such as Nearfield Instruments, the Netherlands is a global leader.”

Semiconductor technology involves chips and electronic components that are integrated into devices and systems. The power of semiconductors lies in their wide range of applications. In your car, they ensure that you stay within the lines and maintain a distance from the vehicle in front of you. They also play a key role in the energy transition, for example, by efficiently managing electricity flows. In healthcare, semiconductors enable advanced scans and AI diagnoses that detect diseases. Chips also keep us safe; they form the heart of smart cameras and detection systems. The global chip market is expected to grow by 9.5% this year.

The role of the Netherlands

The Netherlands has a clear focus on semiconductors. The technology is laid out in the National Technology Strategy. This identifies ten key technologies that knowledge institutions, companies, and the government jointly prioritize. The Netherlands has an impressive semiconductor ecosystem, with an annual turnover of almost €30 billion and employment for around 60,000 people.

It is widely known that Dutch companies play a leading role in the semiconductor industry. Three core areas in which the Netherlands excels are chip machine construction, chip design, and packaging. NXP develops semiconductors and chips for cars, security, and connectivity, among other things. Within the country's borders, we also focus primarily on developing advanced equipment and technologies that are essential for chip production. This is led by companies such as ASML, ASM International, and BESI, which are global leaders in lithography systems, wafer processing equipment, and assembly and packaging solutions, respectively. Emerging companies such as Nearfield Instruments focus on innovative measuring equipment. “So we not only design and build chips, but also the machines and measuring instruments needed to produce them. This makes the Netherlands unique,” says Krijgsman.

According to Krijgsman, the Netherlands is doing particularly well because of the close cooperation between industry, knowledge institutions, and government. “The biggest breakthroughs often occur at the intersection of disciplines. Within Holland High Tech, for example, different areas of innovation that would not normally come together are brought together.” Holland High Tech supports various programs and projects in the sector. In the strategic program Semiconductor Manufacturing Equipment, for example, knowledge institutions are working with both large companies and SMEs to develop innovations in mechatronics, materials science, and physics, which are essential for the semiconductor roadmap and future chips. Through Holland High Tech, many public-private partnership projects in semiconductors have already been subsidized. The investment from 2021 to date is €46 million.

Other examples from the Netherlands: ChipNL is a coalition in which Dutch players such as ASML, NXP, TNO, TU/e, and imec collaborate. The ChipNL Competence Center is another concrete initiative to stimulate innovation, knowledge sharing, and training. The center is financially supported by the European Commission and the Netherlands Enterprise Agency (RVO).

The longer term is also being considered. In the Semicon Board NL, established this year, companies such as ASML, NXP, and VDL ETG are working together with the government, researchers, and industry associations on a joint agenda for the semiconductor sector until 2035.

Europe wants to take control

If we zoom out, we see that many other countries in Europe are focusing on semiconductors. Krijgsman: “The Netherlands has ASML, but there are strong players elsewhere in Europe: Many startups are emerging in France, such as Mistral. Germany is taking the lead in European chip ambitions with support for new factories.”

It's time to join forces. Nine countries founded the European Semiconductor Coalition in March. Austria, Belgium, Finland, France, Germany, Italy, Poland, Spain, and the Netherlands have joined. The collaboration focuses, among other things, on the development of new, reliable, and innovative technologies and strengthening and expanding Europe's position in the global value chain. “This will give the European semiconductor sector a significant boost,” says Krijgsman.

According to him, such a coalition is sorely needed. Europe has valuable companies and collaborations, but its global share of chip sales is falling sharply: from one-third to less than 10%. According to Krijgsman, this is the direct result of insufficient investment in new technology. "Companies such as TSMC, Intel, and Samsung have continued to invest in new factories and innovative chip technology, and have grown enormously as a result. European players who have done less so now mainly fill niches. They are still relevant, but no longer able to compete at the top. It shows that those who do not continue to innovate will fall behind.”

For Europe, it is all the more important to invest in the chip sector and continue to innovate, given the global shortage of critical raw materials. Chips require rare materials such as silicon, lithium, and tantalum. Without its own production and strategic stocks, the EU runs the risk of political tensions and supply problems that put pressure on its technological autonomy.

Challenges within national borders

There are also plenty of challenges to overcome within national borders. The Netherlands invests 2.23% of its GDP in innovation, less than neighboring countries Germany, Belgium, and Sweden, which exceed 3%. “There is a world to be won there,” says Krijgsman. ASML takes a different approach and invested €4.3 billion in R&D in 2024, about 15% of its total turnover. “And that policy remains in place, even in times of crisis. It is precisely by always innovating that the Dutch economy remains competitive.”

In addition, there are practical obstacles. Think of nitrogen regulations, the electricity grid, and physical space for semiconductor companies to grow. Nevertheless, it is definitely worthwhile to work on this. Krijgsman concludes: “If there is one area on which the Netherlands should focus in the coming years, it is semiconductors.”