EBB: 2023 is shaping up to be the year of the chip, with Eindhoven the center of the semiconductor world

(Editor’s note: This edition of the Eindhoven Business Briefing is part of Dispatches’ Tech Tuesdays series. Dispatches covers the innovation scene across Europe because so many of our highly skilled internationals work in tech.)

Buckle your seatbelts. As we segue into 2023 from 2022, it’s looking like this is going to be the year of the chip, taking ASML and Eindhoven to new heights. Why? Because chipmakers can’t make the latest generation of nano circuitry without ASML, the sole manufacturer of extreme ultraviolet photolithography machines required to make 5-nanometer and 3-nanometer chips.

It’s the Gold Rush all over again. The world – particularly the United States – is investing trillions of euros, dollars, Taiwan dollars, pounds and yen to stay competitive, building new chip fabrication plants and funding more engineering programs.

• Taiwan-based TSMC is spending $40 billion to build a fab in Phoenix, Arizona.

• Mountain View-based Intel is spending more than $40 billion to build two new chipmaking plants in Columbus, Ohio.

• Utah-based Micron Technologies is building a $20 billion plant in Syracuse New York.

GlobalFoundries, Samsung, Texas Instruments and others plans to build U.S.-based plants. All told, we’re talking $200 billion over the next few years. And that’s just in the United States. In 2022, Intel announced plans to build a huge fab in Magdeburg, Germany, two hours west of Berlin in Northern Germany.

New semiconductor advancements, including 3 nanometer chips – faster and less energy-hungry than the current 5 nanometer generation of chips – are accelerating that push. TSMC just started mass production of 3 nanometer chips with the smallest circuitry but has plans to go to 2 nanometers. Apple will start using these most advanced chips in iPhones, supplied by the Arizona plant.

ASML makes the machines that TSMC uses, and the very first of ASML’s next-gen high numerical aperture machines are going to Intel.

NASDAQ has a detailed post on why ASML is the big winner in all this … and why it has a 38 billion euro order backlog.

BIG drop in 2022 investments by Dutch VCs

That’s the good news. Now here’s the less-than-good news. We hear it first-hand from our startups … Dutch investors (and European investors) won’t invest until your startup is cash-flow positive, which is way too late in most instances.

We’ve expected this to improve, but alas, it seems to be going in the opposite direction. The Netherlands had the largest decrease – 62 percent – in VC investment of any major economy in Europe, dropping to 2.5 billion for 2022 from about 5.5 billion in 2021, according to PitchBook.

In Europe as a whole, only Lithuania fared worse, with about 70-percent decrease.

By comparison, French VC investment was 18 percent higher and Italy was up 63 percent to 2 billion. Investment by Croatian VCs was a crazy 862 percent to the good, though the total investment value was a fraction of the larger EU economies at about 514 million euros.

Layoffs in consumer tech

While the semiconductor sector is hot, hot, hot, other tech sectors – particularly Dutch app-based startups – are sucking wind.

Eindhoven-based SendCloud and Amsterdam-based MessageBird laid off a lot of people. Just Eat Takeaway in Amsterdam cut 170 employees and is reorganizing its operations in the United Kingdom. What does this mean? Well, conventional thinking is many of these companies grew too quickly during the pandemic, which they mistook for a permanent change in markets and consumer behavior.

Sifted has a solid overview.

Knowledge Sharing Center

ASMLHolland InnovativeMikrocentrum, Innovox & Partners and Thermo Fisher Scientific came together in 2022 to create the Knowledge Sharing Centre, an initiative to build on ASML’s success … and to maintain Eindhoven’s top position as Europe’s high-tech innovation center.

This deep-tech innovation center is all about advanced design. But manufacturing capabilities are still crucial. So the Knowledge Sharing Center is organizing its inaugural event to take “cooperation in the value chain for manufacturing to the next level,” as Mikrocentrum Director Bert-Jan Woertman says in the video above. The concept is Eindhoven can boost the ecosystem through knowledge sharing between manufacturers, engineers and knowledge centers, including universities, with KSC as the connector.

That first event to bring everyone together is the Manufacturing Technology Conference, scheduled for 14 February at the NH Conference Center Konigshof in Veldhoven (which is really Eindhoven.) You can see all the info on keynotes here.

You can come as someone who wants to share knowledge as an exhibitor or as a seeker of knowledge and can register here for free.

Carbyon raised about 2.5 million euros – including 1 million from XPRIZE – for their CO2 removal technology

Silicon Canals recognizes Eindhoven startups that raised 1 million euros-plus in 2022

A down year for the rest of world due to struggling equity markets and inflation, 2022 was a darn good year for a bunch of Eindhoven-based startups, especially those coming out of venture builders HighTechXL and LUMO Labs. And most are based on High Tech Campus Eindhoven.

Silicon Canals has a list of 18 startups/scale-ups that raised more than 1 million euros, a list that includes Carbyon (HighTechXL), which raised more than 2.5 million euros in 2022; inPhocal (HighTechXL) with about 4.5 million, including 2 million from the new DeepTechXL fund created by Guus Frericks; and Technical University of Eindhoven spinout Xeltis, which raised 15 million euros.

But the company that attracted the most investment was serial entrepreneur Johan Feenstra’s latest scale-up, SMART Photonics, which makes speciality photonics chips and now has 75 million euros more to keep growing.

Eindhoven is producing promising startups faster than we can track, rivaling Amsterdam, Paris and Berlin. Yo, it’s all good ….

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Co-CEO of Dispatches Europe. A former military reporter, I'm a serial expat who has lived in France, Turkey, Germany and the Netherlands.

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