LEUVEN, Belgium—Behind the glass walls of imec's 12,000-square-meter-lab, white-coated engineers work with ultra-sensitive machines to push the boundaries of how the world’s most advanced semiconductor chips are built.
Europe may lag behind the United States and China across much of the tech landscape, but it retains a crucial edge in two areas: cutting-edge chip research and the machines used to manufacture them.
From imec in Belgium to ASML in the Netherlands, European firms sit at the frontier of chip innovation. ASML alone produces the extreme ultraviolet, or EUV, lithography systems that power advanced chip fabrication plants in Taiwan, China and the U.S. Without them, much of the world’s semiconductor production would stall.
That position is increasingly geopolitical. A growing chorus of European policymakers and analysts argue the European Union should double down on its strengths — research and lithography — rather than try to catch-up in mass chip manufacturing. The debate is now shaping the direction of the EU's industrial policy under the Chips Act.
“In terms of what makes Europe indispensable, lithography, particularly ASML, is certainly the most visible and critical strength,” said Antonio Calcara, the head of the technology and economic statecraft program at the Free University of Brussels. “However, it is not the only one. Europe’s research and technology organizations, such as imec and others, are also a key asset.”
But that indispensability cuts both ways.
Europe's semiconductor supply remains fragmented: advanced manufacturing is concentrated in Asia, while California-based Nvidia dominates chip design. In a crisis, Calcara said, those dependencies could become liabilities, leaving Europe with influence but limited control over the chips that power modern technologies.
Europe’s edge in the chip race
In November 2022, former U.S. President Joe Biden visited a semiconductor factory under construction in Phoenix, Arizona. Seated beside him were the CEOs of the U.S. companies Apple and Nvidia and the Taiwanese company TSMC — along with Europe’s ASML.
The tableau showed that while the EU had a mere 12.7% of the world’s semiconductor market in 2023, ASML and advanced chip research have made Europe indispensable to the wider semiconductor ecosystem.
Imec is one of several pillars of that strength. Launched in Leuven in 1984, the lab operates on an open-innovation model, allowing companies from around the world to do research inside its cleanrooms. It generated more than €1.2 billion in revenue last year, largely from private-sector partnerships. Alongside hubs like Albany NanoTech Complex in the U.S. and other European labs like CEA-Leti in France and Silicon Saxony in Germany, imec has become one of the top nodes for semiconductor research in the world.
“We are indispensable for Europe’s innovation,” said imec’s Chief Strategy Officer Jo De Boeck. But he said the success is rooted in openness. “Full sovereignty for any region worldwide is crazy," he said. “You need to have partnerships.”
De Boeck’s perspective dovetails with a growing number of industry leaders, trade experts and European security specialists who argue that indispensability rather than full autonomy should guide the continent’s tech strategy.
Belgian Prime Minister Bart De Wever made the case in a February speech at imec, saying that “Europe will not win by trying to outbid China or outscale Asia.” Instead, he called for doubling down on areas where Europe already leads.
Pursuing full technological sovereignty would be a “costly political endeavor” that could undermine security and economic growth, said Riccardo Bosticco, a PhD researcher at the Free University of Brussels specializing in economic security. “Strategic indispensability makes sense to pursue because Europe is already indispensable to these supply chains.”
Some of the most advanced machines on the lab floor at imec are built by Dutch manufacturer ASML. Its most advanced lithography systems sell for hundreds of millions of euros each and require several cargo planes to transport. ASML controls around 80% of the semiconductor lithography market and has a monopoly on EUV technology, which has made it the EU's most valuable company by market capitalization.
Turning Europe’s chip advantage into leverage
Even as Europe holds an edge in chip research and lithography, firms like imec and ASML are wary of being turned into geopolitical tools.
“We don’t want to be leveraged, we want to be embraced,” said De Boeck, pointing to the dense web of collaboration between U.S., Asian and European suppliers that powers imec’s success. ASML, too, is deeply integrated with U.S. partners, said Marc Hijink, the author of Focus: The ASML Way and a technology reporter for the Dutch newspaper NRC.
In practice, though, Europe may not need to wield these assets as blunt instruments, such as limiting sales to targeted countries. Semiconductor supply chains are so interwoven that chipmakers would struggle to operate without ASML or imec — just as those European players depend on U.S. technology and components, said Thomas Van Damme, a policy researcher at the Centre for Future Generations.
While in principle the Dutch government could place even more export controls on ASML’s machines, doing so would be difficult and potentially costly because of possible retaliation, said Julia Hess, the lead researcher on global chip dynamics at Interface. Export controls also remain a largely national competence, which limits intervention on an EU level.
That said, the Dutch government has already limited exports of some ASML machines to China over concerns about Beijing leaping ahead in the AI race. The MATCH Act in the U.S. Congress could also constrain sales. Given many of ASML’s suppliers are in the U.S., its machines are also subject to Washington’s export controls. ASML has never exported its most advanced EUV systems to China.
As the Commission nears a proposal on a second Chips Act proposal for 2026, what path the EU chooses remains to be seen: double down on Europe's advantages in research and lithography or try to ramp up its own chip manufacturing.
Sign up to The Parliament's weekly newsletter
Every Friday our editorial team goes behind the headlines to offer insight and analysis on the key stories driving the EU agenda. Subscribe for free here.