Q3 2025 Quarterly Market Insights 2 - Flipbook - Page 3
CHIPS, geopolitics and policy environment
Government programmes continued to reshape investment: CHIPS and similar public
funding mechanisms remained central to onshoring capacity; U.S. and allied funding
allocations plus state incentives are influencing where leading foundries and OSAT
partners site new projects. Geopolitical tensions - spanning export controls, sanctions,
and strategic industrial policy - continue to complicate operations, especially for firms
straddling the U.S. and China ecosystems.
Europe / EU
Market & regional dynamics
The EU’s semiconductor strategy entered a new phase in Q3 2025 with the launch of
consultations for “Chips Act 2.0,” shifting focus from market share targets to securing
critical technologies and streamlining approvals (European Commission, Sept 2025).
Germany continues to lead in automotive and industrial semiconductors, while France
and Italy expand in power and analog devices. The Netherlands remains pivotal with
ASML safeguarding global lithography leadership, reinforced by a U.S.-EU tariff deal in
July that exempted European fab tools.
Memory, components & demand trends
European OEMs in automotive, EVs, and industrial automation sustained stable chip
demand through Q3 despite cost pressures from higher DRAM/HBM pricing, which
weighed on server and networking builds. Growth in analog, MEMS, and power
electronics helped cushion volatility, with Yole Group highlighting multi-year expansion in
EV power semiconductors. Regional suppliers also benefited from increased silicon
content per device, particularly in advanced driver assistance systems (ADAS) and
industrial automation equipment.
Fabs, investments & corporate moves
Germany anchors the region’s megaprojects with the TSMC–Bosch–Infineon–NXP
fab in Dresden and Infineon’s €5B “MEGAFAB” expansion. France advanced joint
STMicroelectronics and GlobalFoundries capacity plans, while Italy continued supporting
STMicro’s silicon carbide plants for EVs. Ireland’s €17B Intel fab upgrade progressed, the
Netherlands (ASML) reinforced EUV global supply, and Air Liquide pledged €250M in July
to strengthen Europe’s materials infrastructure - collectively underscoring Europe’s
state-backed push for semiconductor sovereignty.
Market Insights
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