Netherlands Channels Defense Funding to Strengthen Chip Industry
The Hague, Thursday, 11 September 2025.
The Netherlands plans to redirect defense budgets to boost its semiconductor sector, emphasizing its global role and bolstering Europe’s strategic autonomy.
Integrating Defense and Innovation Policies
In a strategic shift, the Netherlands is integrating defense and innovation policies by reallocating defense funds to bolster its semiconductor industry. This approach mirrors the model of the U.S. Defense Advanced Research Projects Agency (DARPA), known for funding high-risk, breakthrough research with dual civilian and military applications [1]. The initiative is aimed at not only enhancing economic growth but also ensuring Europe’s strategic autonomy and security through a robust chip manufacturing sector [2].
The Significance of the Semiconductor Industry
The semiconductor industry is pivotal to the global economy, with the electronic components sector valued at €755 billion globally in 2023 [3]. The Netherlands, home to key companies like ASML and NXP, plays a crucial role in this ecosystem, contributing significantly to supply chains that extend across Europe, Asia, and the U.S. [4]. Dutch companies are particularly prominent in producing machines essential for chip manufacturing [5].
Strategic Autonomy and Geopolitical Implications
The geopolitical landscape, influenced by recent developments such as the U.S.-China trade war, has underscored the need for Europe to enhance its strategic autonomy in chip production. The European Union’s Chips Act aims to raise Europe’s share of global semiconductor production to 20% by 2030 [6]. However, recent assessments suggest this target may be challenging to achieve [7]. The integration of defense funds into the semiconductor sector is seen as a necessary step to address fundamental weaknesses in software development and critical supply chain components [8].
Collaborative Efforts and Future Prospects
The Netherlands is actively participating in European research programs such as the Chips Joint Undertaking and the Eureka cluster Xecs to enhance its position in the chip ecosystem [9]. The government has also launched initiatives like the Strategic Defence Innovation Research (SDIR) program to support innovations that can serve both civilian and military purposes [10]. As the global competition in the semiconductor industry intensifies, the Netherlands’ commitment to integrating defense and innovation policies is expected to play a crucial role in maintaining its competitive edge [11].