Netherlands Invests in Photonic Tech Firms to Create New National Chip Champion

With a $1.2-billion investment in next-generation photonic technology, the Netherlands hopes to create a new national chip champion, similar to Veldhoven-based ASML Holding NV.

The technique uses light instead of electronic signals to communicate information and can be employed in chips, which are in high demand due to a combination of supply and demand difficulties around the world.

Regarding the chip shortage, some analysts said the issue will not be solved anytime soon unless demand drops dramatically. Most industry insiders predict the scarcity will last through the second half of 2022, with some products still being delayed in 2023 due to a chip shortage.

However, photonics is one of the six “key enabling technologies” identified by the European Commission. According to previous reports, it was found that photonic integrated circuits increase bandwidth and promise greater speed.

PhotonDelta, a government-backed agency designed to develop a photonics ecosystem in the Netherlands, is in charge of the plan. The group will invest in 200 new businesses and help 26 existing businesses scale up.

The Dutch government will contribute around $509 million, with the remaining funds being co-invested by a number of partners, including the Eindhoven University of Technology and the University of Twente.

Ewit Roos, CEO of PhotonDelta, stated that he expects the Netherlands to dominate the global photonic chip industry as a result of the endeavour, which is similar to ASML’s monopoly on advanced extreme ultraviolet lithography machines.

In terms of market valuation, the company has surpassed Intel Corp.

He said that “if we continue these developments, the photonic sector in the Netherlands should have a turnover of 5 billion euros in 2030”, with a market share of about 30%.

The effort is the Dutch government’s second push to photonic technology, following a 20 million euro investment in Smart Photonics, an Eindhoven-based photonic chipmaker, in 2020 to fend off Chinese interest in the vital sector.

According to Roos, Dutch photonics companies continue to pique Chinese interest. In the midst of trade tensions between the US and China, the government has also thwarted ASML’s attempts to expand into China through sales of its extreme ultraviolet lithography systems, denying a request for an export licence.

“We invested a lot of money and research in solar cells, but lost the entire industry to China. We have the opportunity to do it differently this time around,” said Roos, as reported by Bloomberg.

It is claimed that photonic tech is a strategic and adaptable technology, as the applications range from self-driving cars to the faster, more long-lasting data infrastructure required for quantum computing and 5G connectivity.​

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