Semiconductor Industry in The Netherlands

As one of Europe’s leading hubs for microelectronics, the country attracts global talent and significant investment. One example is Fabrizio Del Maffeo, CEO of Axelera AI, a cutting-edge AI-accelerating chip company.

“I thought the Netherlands was the right place because it’s very international, so it’s easy to attract people. The region where I live, in Brabant, is kind of the semiconductor region of the country”, 

Del Maffeo, CEO, Axelera AI

 

This outlook is primarily due to its established ecosystem and ability to attract global skilled talent. With strategic government policies and thriving industry-academia collaborations, the nation offers unparalleled opportunities for international investors and innovators. The ambition to democratize artificial intelligence across various sectors unfolds against remarkable growth. From 2017 to 2022, the semiconductor sector saw a substantial rise in its economic contribution, surging from 5% to an impressive 24%, with a market valued at around €276 billion.

The semiconductor industry in the Netherlands includes the design, fabrication, assembly, testing, and supply of essential components for modern electronics.

“The Netherlands is the only place in Europe where everyone speaks English; it’s very international, really well connected, and has a high quality of life. These factors make it an ideal place for deep-tech industries like semiconductors.”

Del Maffeo, CEO, Axelera AI

 

Semiconductors drive everything from smartphones to medical devices and are vital to the automotive, healthcare, and communications sectors. The Dutch chip technology sector is crucial in global supply chains, advancing AI, IoT, and automotive tech innovations. As one of only three nations with a complete semiconductor value chain, the Netherlands is a top player in the global market.

However, one major challenge is its heavy reliance on international suppliers. In response, the country is developing a National Technology Strategy to reduce dependencies, exploring “friend-shoring” to relocate production to the EU or allied countries, and ensuring a complete semiconductor value chain within a 220 km radius to maintain control and resilience in its supply chain. These actions aim to safeguard the industry while reinforcing its global leadership.

The Dutch semiconductor market is crucial to the EU, holding about 9% of the global market share. With an annual turnover above €30 billion, it’s expected to grow 8.61% from 2024 to 2029, driven by rising demand for AI, 5G, and high-performance chips in emerging tech.

The Netherlands’ semiconductor sector has surged recently, fueled by cutting-edge R&D and strong collaborations between industry and academia. Strategic investments in research and a robust infrastructure have positioned it as a leader in technological advancement.

Revenue Growth: In 2021, the Dutch semiconductor industry saw a revenue increase of 31.1%, reaching €39.1 billion, as reported by the European Semiconductor Industry Association. This gain surpassed the global growth rate of 26% of $595 billion that year.

Employment Growth: The industry saw a 10% global rise in full-time equivalents (FTEs), reaching 8,451. In the Netherlands, semiconductor earnings grew by 28.6% to around €22 billion, alongside a 12.4% increase in FTEs.

Key players like ASML and NXP semiconductors have cemented the country’s leadership in manufacturing and innovation. Government initiatives to boost research and development will further enhance growth prospects.

The microchip industry is expanding rapidly in several areas, such as automotive semiconductors, AI-driven chips, IoT, and photonic chips.

• Dominance of Equipment Segments

RVO’s report in collaboration with Venture IQ highlights that areas related to semiconductor manufacturing—namely equipment, equipment components, inspection, and metrology—contributed 90% of total earnings growth and 89% of FTE growth in the Netherlands.

• Fastest Growing Segments
  • The Inspection & Metrology subdivision saw the highest FTE expansion, with a 58% national and 62% global increase.
  • Integrated Device Manufacturing (IDM) saw a 32% increase in global revenues, majorly driven by NXP Semiconductors.
  • The IC Design category also grew significantly, with FTE increases of 59% in the Netherlands and 62% globally. However, it still represents a small portion of the overall market.

The automotive electronics domain is rapidly growing with the rise of electric vehicles and autonomous technologies, creating demand for AI-driven semiconductor solutions. Similarly, the IoT niche is expanding as more devices connect, while photonics is gaining traction for its potential to transform data transfer and communications.

The semiconductor industry is a prominent contributor to the Dutch economy, creating jobs and driving innovation. This sector employs over 50,000 people across 300 companies and is essential to maintaining the country’s technological edge and boosting export potential.

The Dutch semiconductor industry is a leading force in the high-tech sector, with €39.1 billion in global revenue in 2021, reflecting 31.1% growth—significantly higher than the Netherlands’ 5% GDP growth that year. This industry’s scale and growth surpass other high-tech sectors like robotics and photonics, and 85% of globally manufactured chips use Dutch technology. Major players such as ASML and NXP, headquartered in the Netherlands, are instrumental in establishing its global footprint.

RVO’s 2022 report indicates that the productivity within the sector has improved, as revenue growth has outpaced FTE growth. This increase suggests that companies are generating more revenue per employee.

The semiconductor industry’s growth in the country is notably higher than the country’s GDP growth rate of 5% in 2021.

Increased the productivity in microchip manufacturing and R&D has established the Netherlands as a leader in innovation and efficient production. This growth also drives expansion in industries like electronics manufacturing and software development.

The semiconductor industry supports multiple sectors by supplying essential components that drive innovation:

Electronics Manufacturing: Semiconductors power electronic devices, with the Dutch industry ensuring a steady supply of high-quality components vital for electronics.

Software Development: Advanced chips enable complex software, including AI and machine learning, expanding software capabilities as chips advance.

Automotive Industry: Companies like NXP provide critical semiconductor tech for automotive applications, including advanced driver assistance systems.

Medical Devices: Reliable semiconductor components are essential for diagnostic and patient care advancements in medical technology.

The Netherlands is home to industry giants like ASML, NXP, and ASM, all well-known for their chip technology innovation. 

Key players in the Dutch semiconductor landscape include:

ASML: A global leader in photolithography equipment with a 90% market share, ASML is the only company capable of producing EUV lithography machines for advanced semiconductors. It is the largest semiconductor company in the region by market value (€275 billion) and employs around 39,000 people worldwide.

NXP Semiconductors: A substantial innovator in the automotive, industrial, and IoT sectors, NXP holds 10.8% of the global automotive semiconductor market. In 2023, it reported $13.2 billion in revenues and employs 31,000 people globally, with its Eindhoven campus as a powerful R&D hub.

Besi (BE Semiconductor Industries): Besi specializes in semiconductor packaging and assembly and holds 39% of the global Die Bonder Equipment market. It reported €1.42 billion in revenues in 2023, with a significant focus on high-performance computing and 5G applications.

ASM International: Known for wafer processing equipment, ASM holds 55% of the atomic layer deposition (ALD) market. In 2023, it achieved €2.68 billion in revenue, driven by demand for advanced deposition technologies in chip production.

“The Netherlands is globally recognised for its unique strength in developing advanced semiconductor equipment and its strong, collaborative high-tech ecosystem.” 

Marsha Nieuwland, Consultant, TNO

These companies, with numerous small and medium-sized enterprises, form a robust ecosystem, contributing significantly to national and global markets and maintaining the country’s leadership in the semiconductor value chain. 

Despite the Netherlands’ leadership in semiconductor technology, its dependency on a few large companies, especially ASML, poses a vulnerability. To mitigate this challenge, the country fosters collaboration through research clusters, integrating government, industry, academia, and civil society in a Quadruple Helix approach. This strategy aims to diversify the sector, drive innovation, and ensure long-term growth. Alongside a robust ecosystem of small and medium-sized enterprises, these efforts strengthen the Netherlands’ semiconductor leadership and attract further investment.

The Dutch region is a hub for semiconductor innovation, especially in AI-integrated chips, 5G, quantum computing, and heterogeneous integration.

“Exciting developments are emerging beyond traditional semiconductor fields, such as photonics and spintronics. These fields are utilizing existing semiconductor knowledge to revolutionize the field, similar to how electronics did decades ago.”

Jerald Delos Santos, Application Engineer, Qualinx

Companies like ASML have pioneered extreme ultraviolet (EUV) lithography, enabling the production of small, more efficient chips that significantly enhance energy efficiency and data processing speeds. Ongoing research in materials science and fabrication techniques further advances chip design and production capabilities.

The Dutch government’s supportive framework fosters collaboration among companies, research institutions, and universities. With evolving regulations addressing security concerns, it has committed €2.5 billion to strengthen Brainport Eindhoven’s business climate through education, infrastructure, and housing investments.

“Thanks to RVO’s innovation credits, we got the missing capital to complete the development of our first product. The WBSO also reduced employment costs, making the Netherlands one of the most affordable places in Europe for semiconductor R&D.”

Del Maffeo, CEO Axelera AI

However, the industry faces challenges from export restrictions, particularly on advanced chip-making equipment to China, which could affect Dutch firms like ASML. To address this, the Netherlands has implemented strategic export controls to balance economic interests with national security. 

Even Marsha emphasizes the industry must navigate geopolitical tensions and rapid technological shifts to remain competitive globally. 

Additionally, it is actively engaged in European-level strategies, such as the European Chips Act, to strengthen resilience within the semiconductor ecosystem and expand Europe’s market share. This collaborative, EU-wide approach seeks to secure the Netherlands’ role in the global market while mitigating dependencies on non-EU suppliers and balancing economic growth with strategic technological autonomy.

The investment climate for semiconductors in the Netherlands is strong, driven by a skilled workforce, advanced digital infrastructure, access to capital, and a thriving startup ecosystem. Government initiatives and public-private partnerships further support the industry’s growth.

The Dutch government offers financial incentives, grants, and subsidies, making the country an attractive destination for foreign direct investment (FDI) and new ventures. These investments focus on advancing research and development, expanding manufacturing, and fostering international collaborations. More information about foreign direct investment in the semiconductor sector in the Nehterlands can be found via the Netherlands Foreign Investment Agency (NFIA)

As part of its Technology and Innovation Strategy, the Dutch government has committed €230 million to semiconductor research projects. This investment aims to boost domestic and foreign investment in the growing sectors and enhance the country’s strategic autonomy in semiconductor production.

The Netherlands has established itself as a critical player in the global semiconductor landscape through its blend of industry expertise, academic partnerships, and supportive policies. With an eye toward innovation, resilience, and strategic autonomy, the Dutch microchip industry is leading advancements in high-impact sectors like AI, 5G, and quantum computing while continuing to attract skilled talent and investment to sustain its growth.