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    Home » China increases chip production as Europe hits shortage crisis
    ASML
    ASML
    IT Infrastructure

    China increases chip production as Europe hits shortage crisis

    By Miurio HuangJuly 9, 2024No Comments3 Mins Read
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    • In a recent interview with Germany’s Handelsblatt newspaper, ASML’s CEO Christophe Fouquet discussed the current trends in the semiconductor industry.
    •  The situation described by Fouquet is crucial for the global semiconductor supply chain and various industries, especially automotive.

    OUR TAKE
    The semiconductor industry’s latest twist reveals a startling dependency on China’s legacy chips. ASML’s CEO Christophe Fouquet warns that while demand for these older-generation chips skyrockets, western firms are dragging their feet, blinded by profit margins. Meanwhile, China surges ahead, ramping up production amidst U.S.-led tech restrictions. This isn’t just about chips; it’s about geopolitical leverage and industrial survival. Europe’s failure to meet its own chip needs exposes a glaring vulnerability, begging the question: are we ready to let China dominate this critical sector? Fouquet’s message is clear: invest now, or face a future of technological dependence and strategic insecurity.
    –Miurio huang, BTW reporter

    What happened

    In a recent interview with Germany’s Handelsblatt newspaper, ASML’s CEO Christophe Fouquet discussed the current trends in the semiconductor industry. 

    ASML, Europe’s largest tech firm, is observing increased investments by Chinese chipmakers in legacy computer chips. 

    The European Commission has begun surveying companies, including ASML, for their perspectives on these investments. 

    Fouquet noted that the German automotive industry, among others, depends heavily on these older-generation chips, which are manufactured using established technologies. Fouquet also pointed out that Chinese firms are expanding their capacity to produce these simpler chips due to U.S.-led restrictions on advanced technology. 

    Despite the global demand for these chips rising dramatically, western firms are not investing enough in their production because it is not very profitable. 

    Also read: Huawei Cloud CEO: AI leadership unhindered by chip shortage

    Also read: Samsung’s profit soars 1,500% amid AI-driven chip demand

    Why it’s important

    The situation described by Fouquet is crucial for the global semiconductor supply chain and various industries, especially automotive. The dependency of the automotive sector on legacy chips highlights the need for a stable supply of these components. Europe’s inability to meet its own chip needs underscores a strategic vulnerability that could affect multiple industries.

    Chinese chipmakers are expected to increase their production capacity by 14% in 2025, potentially controlling a significant portion of global production. This rapid expansion poses a strategic challenge for western countries, raising concerns about potential oversupply and dependency on Chinese manufacturers. Fouquet’s comments suggest that instead of trying to limit China’s production, western nations should focus on developing alternatives and investing in their own chipmaking capabilities. This shift in investment priorities is essential to ensure supply chain resilience and technological independence.

    ASML chip market European Commission
    Miurio Huang

    Miurio Huang is an intern news reporter at Blue Tech Wave media specialised in AI. She graduated from Jiangxi Science and Technology Normal University. Send tips to m.huang@btw.media.

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