ASML generated no revenue from chip equipment sales in Europe last quarter. According to Vice President Frank Heemskerk, this signals a larger problem: Europe is underinvesting in its own chip production and missing out on a significant share of the market that drives new technology development.
“Our market share in Europe, and this wasn’t because of other competitors, has dropped to zero percent of ASML’s revenue in the last quarter. So we’re not selling anything at all in Europe,” Heemskerk said during a debate at De Balie on investments in technology.
According to him, the cause is a lack of new production capacity. “That’s because Europe isn’t investing and because no chip factories are being built in Europe. And that’s truly concerning.”
Customers drive innovation
For ASML, this isn’t just about revenue. Proximity to major customers helps determine where and how ASML develops new technology. Heemskerk pointed to agreements ASML has made with major chip manufacturers regarding future generations of machines. He named Samsung, Intel, TSMC, and SK hynix as key customers.
That collaboration can precede the introduction of new equipment by years. For an innovation set to appear in machines around 2031, for example, both the equipment and the customers’ factories will need major modifications, according to Heemskerk. “Because you work very closely with customers and the market, you’re able to innovate.”
ASML itself invests more than four billion euros annually in research and development. According to Heemskerk, about three-quarters of that is spent in the Netherlands. He notes that ASML’s R&D spending in the Netherlands is roughly equal to that of the companies ranked second through eleventh combined.
More than just chip factories
Heemskerk views the problem as broader than just chip production. In his view, Europe also has little activity of its own in other parts of the technology chain. “Everything from manufacturing to chip design to the cloud, cloud computing happens very rarely in Europe.”
At the same time, he warns against the idea that Europe should be able to control the entire chip chain independently. In his view, no single country or region can produce advanced chips on its own. Global interdependence also has advantages, as long as Europe itself maintains sufficiently strong positions.
“Make sure you also have a few trump cards of your own and that you have a number of strengths,” says Heemskerk. In his view, Europe should therefore focus less on confrontations with the United States and China and more on strengthening its own market, in part by removing barriers within the European single market.
Pooling demand
More subsidies are not automatically the solution here. Heemskerk sees greater value in organizing European demand. Governments and large industrial companies could pool their needs for, say, cloud and data center capacity. This could then trigger investments further down the chain, from chip design to chip production. “I would invest in pooling demand,” Heemskerk said. “And then, through market forces, you ultimately create initial momentum in Europe again.”
For the Netherlands, he sees a role primarily in creating the right conditions. ASML itself does not need government funding, he emphasized. According to him, the company primarily needs infrastructure, education, sufficient housing, available energy, and predictable policy. Regarding the latter, he briefly summarized his preference: “The more boring, the better.”