(Frankfurt am Main, September 2, 2025) Microelectronics is crucial to the innovation and competitiveness of Germany and Europe. While Europe is still busy catching up and struggling in this highly dynamic field, the US and Asia are massively expanding their capacities – and Europe is in danger of falling behind for good. “In microelectronics, we are far too dependent on other regions of the world,” warns Prof. Christoph Kutter, Director of the Fraunhofer Institute for Electronic Microsystems and Solid State Technologies (EMFT), Deputy VDE President and co-author of the new position paper “Hidden Electronics IV”. “We must act now, otherwise we risk our prosperity, our security, and our technological sovereignty.”
The new position paper, presented at the VDE Annual Reception during the European Future Technology Summit in Brussels in early September, analyzes the geopolitical framework, identifies risks and strengths, and formulates recommendations for politics, business, and research. Although Europe has lost market share, it still has strategically important competencies – for example in power semiconductors, sensor technology, edge AI, and lithography. These must be strengthened in a targeted manner and expanded through coordinated industry initiatives.
Ahead in science – catching up in chip design
Europe has certainly made progress in recent years. In Saxony, the Dresden chip factories have created a powerful ecosystem, supplemented by the EU funding instrument IPCEI (Important Projects of Common European Interest). With ASML, Europe also has the world market leader in lithography machines. Research initiatives such as FMD, FORLAB, and the 6G hubs show that European science is excellently positioned.
However, there are serious shortcomings in chip design: the most important design tools come almost exclusively from the US. According to the VDE, Europe must therefore build up its own electronic design automation (EDA) expertise and consistently promote open-source approaches such as RISC-V. This is the only way to reduce dependencies and attract new market participants.
Expanding support and partnerships
In addition, the position paper calls for strengthening manufacturing capacities, providing more targeted support for start-ups, making venture capital more readily available, and expanding successful incubators. It is equally important to promote new future markets such as robotics, personalized medical technology, and high-performance computing at an early stage. In the long term, research funding must be stabilized to ensure continuity. Attractive conditions are needed to attract top international talent to Europe.
Complete self-sufficiency in semiconductor production is not a realistic goal – but reducing critical dependencies through strategic partnerships with technologically strong countries such as Japan, Taiwan, and Singapore is.
“Without a coordinated approach, Europe will permanently slip into second place in microelectronics. Sovereignty and resilience in the semiconductor sector are not optional extras, but a must,” emphasizes Dr. Ronald Schnabel, Managing Director of the VDE/VDI Society Microelectronics, Microsystems and Precision Engineering (VDE/VDI GMM). “If Europe wants to remain a strong industrial region, we must set the course now.”
Why microelectronics and microsystems technology are important drivers of progress is also the topic of the MikroSystemTechnik Kongress 2025, (in German), which the VDE GMM and VDI/VDE-IT are hosting in Duisburg from October 27 to 29.
Hidden Electronics: Microelectronics as a key technology
“Hidden Electronics IV” is the fourth position paper in a series launched by the VDE professional associations responsible for microelectronics and information technology – VDE VDI GMM and Information Technology Society within the VDE (VDE ITG). The first of these papers, “Hidden Electronics”, was published in 2014.
Further current topics relating to microelectronics can also be found in the new issue of the technology magazine VDE dialog, which will be published on October 1. Interested parties can already find more detailed information on “Hidden Electronics IV” here.
