When US officials wanted to pressure Europe to do more to stave off China’s technological advances, they did not call EU headquarters in Brussels. They instead decided to travel to the Netherlands, home to ASML Holding, the world’s only supplier of high-end semiconductor-making equipment and thus a critical global chokepoint in the US$380 billion global chip wars.
The power wielded by ASML from its campus in Veldhoven is one example of how Europe’s geography is changing. French munitions factories and Italian shipyards are whirring as the war in Ukraine forces defense matters to front of mind. Chip factories are being built in cities that still bear the scars of World War II. Kalundborg, production hub for Ozempic maker Novo Nordisk, is turning Denmark into a one-company country. Sweden is tapping raw-material deposits essential for the green transition. Finland is converting paper mills into supercomputers.
This is symptomatic of a bigger shift. Europe’s geography has for much of this century highlighted the soft power of an economic union — the cafes, canals and monuments pursued by tourists, the single market of 440 million consumers promoted by technocrats, the trial-by-telephone carnival of Eurovision. High-speed communications, travel and finance made connectivity key and saw jobs and capital flow to imperial centers such as Paris and London, supranational hubs such as Brussels, and transnational clusters such as the Manchester-to-Milan “blue banana.”
Today’s de-globalizing world has turned that connectedness into a weakness, particularly those dependencies and physical connections that Europe essentially took for granted. The Nord Stream pipeline’s sabotage in the wake of Russia’s invasion of Ukraine was a costly reminder of the vulnerabilities of Germany, and Europe. The export route to China has been tarnished by COVID-19 pandemic-era lockdowns, technology transfers and competition for raw materials. Dependence on the US for technology and security looks risky as political winds change.
The result is a new focus on the “material underbelly of European economies and societies,” Leevi Saari of the University of Amsterdam said.
Hence, government officials and visiting dignitaries have more European stops to make than they used to. Dresden, a city whose name still carries the legacy of wartime bombing, is being revived as an innovation hub for designing and making chips — “the raw material of the 21st century,” says German Chancellor Olaf Scholz. Taiwan Semiconductor Manufacturing Co (台積電), along with Infineon Technologies, NXP Semiconductors and Robert Bosch, has agreed to build a 10 billion euros (US$10.8 billion) plant there. Among the attractions, apart from human capital: A granite soil base that protects against vibrations. The Belgian royal couple visited last year, and French President Emmanuel Macron is due to go.
In Finland, the engines for artificial intelligence are being built on the ashes of old industries: A new supercomputer called LUMI, housed in a converted paper mill in a town called Kajaani, was unveiled in 2022 by EU Commissioner for Competition Margrethe Vestager as the world’s third-fastest.
Catching up in technology and beefing up economic security increasingly mean securing access to raw materials and reducing resource dependencies — the EU relies on China for almost all of its rare-earth supply and processing, for example. The recent discovery of the largest known deposit of rare earths in Europe, just north of the Swedish arctic town of Kiruna, could be a game-changer, even if it would take 10 to 15 years before mining there even begins.
Of course, it is the war in Ukraine that has awakened the need for hard power of the crudest kind. Last month, Macron visited Bergerac, southwest France, where a gunpowder factory is being built that is to produce 1,200 tonnes per year — on a site that was discontinued for lack of business in 2007. Nearby Merignac (population: 75,000) is also getting a boost as the home of the Dassault Aviation Rafale fighter jet, sales of which have lifted France to the rank of the world’s No. 2 arms exporter. In Germany, in Unterluess in Lower Saxony, a new Rheinmetall factory is to produce shells and explosives to alleviate Ukraine-related shortages; the site is also home to the largest private weapons testing area in Europe.
It is not just land power. The Italian port of Trieste has attracted the attention of the US for its rising geopolitical clout in Mediterranean trade. It is also home to shipbuilder Fincantieri, which is expanding its sub-sea business in a post-Nord Stream world where telecommunications cables and oil rigs need more protection.
To be clear, this burst of industrial activity across the European map has limits. Workers and money are not infinite, especially when faced with demographic decline and stretched budgets, and big firms can break places as well as make them when their fortunes fade — think Nokia.
Which is why those abstract European ideals of old still have a role to play. A more geopolitically minded region is a good thing; a more fragmented one is not. These disparate power centers should inspire more pooling of financial resources at the EU level to sustain them, and more international alliances to defend them.
Sander Tordoir and Zach Meyers of the Centre for European Reform suggest more targeted support for areas of dominance such as ASML’s technology, a more pan-European approach to industrial policy and the creation of alliances with like-minded partners on chip supply chains.
Let us hope that means we will always have Veldhoven — not just Paris.
Additional reporting by Elaine He
Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. Previously, he was a reporter for Reuters and Forbes. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Russian President Vladimir Putin’s hypersonic missile carried a simple message to the West over Ukraine: Back off, and if you do not, Russia reserves the right to hit US and British military facilities. Russia fired a new intermediate-range hypersonic ballistic missile known as “Oreshnik,” or Hazel Tree, at Ukraine on Thursday in what Putin said was a direct response to strikes on Russia by Ukrainian forces with US and British missiles. In a special statement from the Kremlin just after 8pm in Moscow that day, the Russian president said the war was escalating toward a global conflict, although he avoided any nuclear
Would China attack Taiwan during the American lame duck period? For months, there have been worries that Beijing would seek to take advantage of an American president slowed by age and a potentially chaotic transition to make a move on Taiwan. In the wake of an American election that ended without drama, that far-fetched scenario will likely prove purely hypothetical. But there is a crisis brewing elsewhere in Asia — one with which US president-elect Donald Trump may have to deal during his first days in office. Tensions between the Philippines and China in the South China Sea have been at
US President-elect Donald Trump has been declaring his personnel picks for his incoming Cabinet. Many are staunchly opposed to China. South Dakota Governor Kristi Noem, Trump’s nomination to be his next secretary of the US Department of Homeland Security, said that since 2000, China has had a long-term plan to destroy the US. US Representative Mike Waltz, nominated by Trump to be national security adviser, has stated that the US is engaged in a cold war with China, and has criticized Canada as being weak on Beijing. Even more vocal and unequivocal than these two Cabinet picks is Trump’s nomination for
An article written by Uber Eats Taiwan general manager Chai Lee (李佳穎) published in the Liberty Times (sister paper of the Taipei Times) on Tuesday said that Uber Eats promises to engage in negotiations to create a “win-win” situation. The article asserted that Uber Eats’ acquisition of Foodpanda would bring about better results for Taiwan. The National Delivery Industrial Union (NDIU), a trade union for food couriers in Taiwan, would like to express its doubts about and dissatisfaction with Lee’s article — if Uber Eats truly has a clear plan, why has this so-called plan not been presented at relevant
RSS