China dominates? | ASML CEO says the world needs traditional chips produced in China

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Christophe Fouquet, CEO of chip equipment giant ASML, said in an exclusive interview with Germany’s Handelsblatt that chip buyers, including the German automotive industry, need the traditional chips that Chinese chip manufacturers are currently investing in.

Fouquet took over as CEO of ASML in April this year, and traditional chips are an important source of revenue for ASML. The European Commission has begun collecting the views of ASML and other companies on Chinese investment in traditional chips.

“The automotive industry in particular, including the German automotive industry, needs more chips made with simpler, more mature technology,” he told Handelsblatt newspaper.

Faced with U.S. restrictions on advanced technology, Chinese companies are expanding capacity to make these traditional chips, raising concerns in the West about the possibility of a long-term oversupply.

Fouquet said global demand for such chips is rising sharply, but the profits from producing them are not high and Western companies are not investing enough; “Europe cannot even meet half of its own needs.”

Industry group SEMI estimates that China’s chip makers’ production capacity will increase by 14% by 2025, more than double that of the rest of the world, to 10.1 million wafers per month by 2025, accounting for about a third of the world’s total output.

“If someone wants to slow things down for whatever reason, then there needs to be alternatives,” Fouquet said. “There’s no point in stopping someone from producing what you need.”