--- title: "Bundesregierung IPCEI Advanced Semiconductor Technologies Deutschland; 3,8 Mrd Euro Förderung" sdDatePublished: "2026-08-27T08:07:00Z" source: "https://silicon-saxony.de/en/microelectronics-under-pressure-why-europes-security-of-supply-depends-on-more-than-just-chips/" topics: - name: "computing and information technology" identifier: "medtop:20000225" - name: "semiconductor and electronic component" identifier: "medtop:20000230" - name: "computer and telecommunications hardware" identifier: "medtop:20000226" - name: "computer networking" identifier: "medtop:20000227" - name: "energy industry" identifier: "medtop:20000261" - name: "international trade" identifier: "medtop:20000373" - name: "logistics" identifier: "medtop:20001170" locations: - "Sachsen" - "Dresden" - "Iran" - "China" - "Netherlands" - "Germany" - "South Korea" - "United States" - "Taiwan" - "Japan" --- Bundesregierung IPCEI Advanced Semiconductor Technologies Deutschland; 3,8 Mrd Euro Förderung Microelectronics Under Pressure: Why Europe's Security of Supply Depends on More Than Just Chips - Silicon Saxony Würth Elektronik: The Next Shortage Is Here—The AI Boom Is Exacerbating the Shortage of Materials for Printed Circuit Boards Fraunhofer IPMS: Integrated Photonics as a Key Technology for Compact and High-Performance Systems Fraunhofer IZM: Sustainable medical electronics can reduce environmental impacts by up to 65 percent Microelectronics Under Pressure: Why Europe’s Security of Supply Depends on More Than Just Chips August 27, 2026. Europe aims to become more independent in the field of microelectronics. This challenge begins long before the chip factory. Ultra-pure raw materials, specialty chemicals, and process gases come from just a few—and in some cases competing—regions of the world. Strategic dependencies also arise in the areas of EDA software, advanced packaging, memory, and certain manufacturing equipment. At the same time, currently high energy prices, a shortage of skilled workers, geopolitical conflicts, and fragile transportation routes are intensifying the pressure on supply chains. Our feature article today highlights where Europe’s critical bottlenecks lie, which dependencies are particularly dangerous, and how it is possible to position the microelectronics sector for the future despite geopolitical, climatic, and resource-related challenges. Telefon: +49 351 8925 886 The discussion about Europe’s semiconductor supply security is often reduced to a single question: How many chips are manufactured in Europe? This perspective falls short. The actual dependence begins long before wafer manufacturing and extends far beyond the finished semiconductor. Raw materials (such as rare earths and high-purity metals), high-purity chemicals and gases, wafers, manufacturing equipment, design software, photomasks, packaging, testing capabilities, energy, water, skilled workers, and logistics form a tightly integrated system. Current developments in the summer of 2026 in particular demonstrate just how vulnerable this system is: from rising energy prices to logistical challenges and water shortages, to export restrictions on key raw materials and geopolitical conflicts. Europe possesses significant technological strengths, for example in lithography, specialized machinery, chemicals, sensor technology, power electronics, and certain industrial semiconductors. At the same time, there are significant dependencies on the U.S., Taiwan, South Korea, Japan, and China. The European strategy must therefore focus less on complete self-sufficiency and more on strategic resilience, diversification, and securing critical nodes. The semiconductor value chain is a global network A modern semiconductor is not produced in a single factory. The value chain can be broadly broken down into interconnected aspects: chip architecture, design, and EDA software high-purity silicon and other substrates Photomasks and other manufacturing inputs Printed circuit boards and system integration Integration into vehicles, machinery, data centers, telecommunications, and other ICT systems In addition, there are cross-cutting factors such as energy, water, skilled workers, financing, digital infrastructure, cybersecurity, and international logistics. The policy challenge lies in the fact that this chain—or, in reality, the far more complex interaction among its stakeholders—is only as resilient as its weakest links. For example, a European fab may have sufficient production capacity but still come to a standstill if a specific process gas, a photomask, or a replacement part for a production machine is not available—or not available quickly enough. The German federal government has now taken this reality into account. The IPCEI “Advanced Semiconductor Technologies,” planned for 2026, explicitly covers the entire value chain—from materials and manufacturing equipment to chip design, semiconductor production, and modern packaging technologies. Thirty-five projects are planned for Germany; the federal government is providing up to 3.8 billion euros for this purpose, and total investment in Germany is expected to be just under 10 billion euros. Raw Materials: The First Strategic Bottleneck At the beginning of the chain are materials that may be produced in relatively small quantities but are indispensable for certain semiconductor processes. These include, among others, silicon, gallium, germanium, indium, arsenic, phosphorus, boron, copper, tungsten, cobalt, tantalum, and rare earth elements. The crucial question here is not merely where a raw material is found. Rather, what matters is where it is mined, refined, and processed to the purity required for semiconductor production. This is particularly evident in the case of gallium and germanium. China holds a dominant position in several critical raw materials. This creates a dependency that can very quickly turn into an industrial bottleneck due to export controls or political decisions. For Europe, this means that processing a raw material within Europe does not automatically eliminate dependence if the raw material must still be sourced from a single non-European source. Europe is therefore seeking to build up recycling capacities in addition to developing new primary sources. A particularly timely example is electronic waste. Reuters reported on August 24, 2026, that Europe effectively recycles less than 20 percent of the electronic waste it generates. At the same time, the critical materials contained in this waste are being lost. The EU aims to meet approximately 25 percent of its demand for critical raw materials from recycling sources by 2030. As a result, recycling is increasingly becoming a matter of industrial security. Electronic waste is no longer just trash, but a potential European raw material reserve. Wafers: Europe’s position is more nuanced than often assumed Single crystals are produced from high-purity silicon, and wafers are made from these crystals. Europe certainly possesses industrial expertise at this stage. However, the supply situation varies depending on the type of wafer and semiconductor. So-called compound semiconductors such as GaAs, GaN, InP, and SiC are particularly relevant. Among other things, they play an important role in power electronics, high-frequency technology, photonics, and certain applications in telecommunications. Germany possesses relevant expertise in this area through companies and research institutions, for example in Saxony and other regions. The current IPCEI AST therefore explicitly addresses materials, chemicals, and raw wafers as strategic “enablers” of the semiconductor industry. The key challenge is to secure European manufacturing not only for end products but also for these upstream specialty materials. Specialty Chemicals: Tiny Quantities, Maximum Importance A modern semiconductor fab is characterized to a large extent by the processing of a whole range of elements from the periodic table. Chemicals of extremely high purity are required for cleaning, etching, lithography, doping, deposition, and polishing processes. These include, among others, hydrogen fluoride (also known as hydrofluoric acid), sulfuric, hydrochloric, and nitric acids, ammonia, solvents, and numerous highly specialized process chemicals. The difficulty in the event of a supply disruption lies in the fact that one cannot simply turn to just any supplier. To address this, semiconductor companies implement second- and third-source strategies or strive to maintain sufficient inventory levels. This is because materials must be qualified for use in highly sensitive manufacturing processes. Even minor differences in purity or composition can affect process yield. This creates a unique form of supply chain risk: a small number of suppliers combined with long qualification times and high quality requirements. Europe has significant strengths, particularly in the area of specialty chemicals. Nevertheless, the supply of individual products is concentrated globally. A fab’s resilience therefore depends not only on the number of its direct suppliers but also on their upstream supply chains. Process gases: An Invisible Critical Factor This applies even more strongly to specialty gases. Semiconductor manufacturing requires, among other things, nitrogen, argon, hydrogen, helium, neon, krypton, and xenon, as well as numerous reactive gases and precursors. These gases are used in etching, doping, and deposition processes. If one of these substances is missing, it is of little help if the fab itself has spare production capacity. For Europe, this means that the production and processing of these gases must also be considered part of the critical infrastructure. Manufacturing Equipment: Europe’s Great Strength—with Limitations Europe holds an exceptionally strong position in semiconductor manufacturing equipment. The most prominent example is lithography. The Dutch company ASML is a global leader and holds a unique position, particularly in EUV lithography. At the same time, ASML itself is integrated into a highly global supply chain. This is an important example of the true nature of Europe’s dependence: even a European technology leader can be dependent on international supply chains. In addition to lithography, equipment is needed for deposition, etching, cleaning, ion implantation, chemical-mechanical polishing, inspection, and metrology. American and Japanese companies are particularly strong in several of these areas. While Europe thus holds a strategically crucial part of the value chain, it does not have complete control over the entire production system. However, this also applies to all other countries and regional blocs. Photomasks: A small product with major strategic implications Photomasks transfer the structures of the chip design onto the wafer. In modern manufacturing technologies, they are highly complex and technology-specific products. The production of high-quality masks and mask blanks is highly concentrated internationally. Japanese and American companies play an important role here. The problem is similar to that of process chemicals. An alternative product cannot simply be deployed at short notice. A change may require extensive testing and qualification. This makes photomasks a typical few-source bottleneck. Front-End Manufacturing: The Fab as a Highly Complex Ecosystem In the actual wafer manufacturing process, the chip is built up layer by layer. Lithography, etching, deposition, doping, cleaning, and polishing are repeated in hundreds of process steps. The key insight is this: A fab is not an isolated plant, but a highly complex network of machines, chemicals, gases, software, water, electricity, and specialists. This is why a fab can remain vulnerable even with sufficient nominal production capacity. Added to this is the enormous importance of energy and water supplies. Semiconductor fabs require large amounts of electrical energy and water, as well as an exceptionally high quality of supply. Production interruptions cannot simply be offset by adding an extra shift later on. Depending on the process, disruptions can jeopardize entire production batches or even render them completely unusable. Energy Becomes Part of the Semiconductor Strategy In Germany, industrial producer prices in July 2026 were 3.0 percent higher than the previous year’s level. Energy prices rose by 3.8 percent, while intermediate goods rose by as much as 5.4 percent. The trend was even more pronounced in wholesale prices. Non-iron ores, metals, and semi-finished metal products were 27.8 percent more expensive than a year earlier, while chemical products rose by 13.1 percent. Information and communication technology equipment rose in price by 9.0 percent at the wholesale level. This does not mean that each of these price increases is directly