Europe is expanding semiconductor manufacturing capacity through major investments in Ireland, Germany and Italy, but the region continues to rely heavily on imported electronic-grade materials and processing capacity in Asia. Key developments in 2026 include Intel’s €5 billion investment at Leixlip in Ireland, €659 million in approved German support for four semiconductor facilities, and STMicroelectronics’ €5 billion silicon-carbide campus in Catania.
The Catania project is planned as an integrated 200mm silicon-carbide operation, covering the production chain from substrates and wafers through power devices, testing and packaging. The investment programme is expected to increase European demand for a broad group of technology-related minerals and high-purity materials beyond conventional semiconductor-grade silicon.
Critical materials across semiconductor manufacturing
Gallium is required for gallium-nitride power electronics, radio-frequency chips, radar and satellite communications. Germanium is used in fibre optics, infrared equipment, silicon-germanium chips and specialised solar cells, while indium serves applications including displays, touchscreens, indium-phosphide optical devices and high-speed data-centre communications.
Silicon carbide is increasingly relevant to EV inverters, industrial drives, renewable-energy equipment and data-centre power supplies. Tantalum is used in capacitors and corrosion-resistant semiconductor equipment. Meanwhile, tungsten, cobalt, ruthenium and copper are required for microscopic interconnects, electrical contacts and chip-manufacturing equipment.
Other materials also form part of the semiconductor supply chain. Hafnium is used in advanced transistor dielectrics and control applications, while helium, neon, argon and other high-purity gases are required for lithography, cooling, deposition and etching. Gold, silver, tin and palladium are used in connectors, solder, packaging and electronic components, while high-purity quartz is required for crucibles used to grow semiconductor-grade silicon crystals.
European supply depends on by-product recovery
Europe’s exposure to imported technology materials does not necessarily reflect an absence of mineral resources. Gallium, germanium, indium and tellurium are commonly recovered as by-products from aluminium, zinc, copper and other processing streams. European smelters have the technical capacity to produce some of these materials, but recovery has frequently been uneconomic because international prices have been influenced by lower-cost Chinese supply.
Market conditions are changing as the cost of securing non-Chinese material increases. European prices for gallium, dysprosium and terbium are approximately five times Chinese domestic levels, while germanium is nearly three times higher. These differentials reflect the additional costs associated with sourcing material outside the dominant supply system, including certification, inventory requirements and geopolitical risk.
Processing and recycling offer near-term supply options
Europe retains important positions elsewhere in the technology value chain. ASML provides the region with a critical position in advanced lithography, while imec, Infineon, STMicroelectronics, NXP, Bosch and GlobalFoundries have established capabilities spanning research, automotive semiconductors, sensors, power semiconductors and mature-node manufacturing. The supply chain nevertheless remains incomplete. Europe imports substantial volumes of wafers, chemicals, photoresists, permanent magnets and processed minor metals, while a significant share of semiconductor assembly and testing continues to be carried out in Asia.
For the European minerals and materials industry, the immediate commercial opportunity therefore lies in refining and recycling as well as primary extraction. Aurubis, Boliden and Umicore, together with specialised chemical companies, could recover greater quantities of tellurium, selenium, indium, germanium, gallium and precious metals from European concentrates, electronic waste and smelter residues. Urban mining is particularly relevant for electronic waste. Discarded circuit boards contain copper, gold, silver, palladium and tin, with concentrations that can be higher than those found in primary ores.
Data centres add demand for copper and photonics materials
The expansion of artificial-intelligence infrastructure creates another source of demand for technology materials. Planned European data centres require copper and aluminium for grid connections, transformers, busbars and cooling systems. Within computing clusters, higher-speed optical connections increase requirements for indium phosphide, germanium, gallium arsenide and ultra-pure silicon. The shift from 800-gigabit to 1.6-terabit optical connections further increases demand across the photonics market, even as optical fibre replaces some short-distance copper cabling.
Permanent magnets are also important technology materials rather than simply rare-earth commodities. Neodymium and praseodymium provide magnetic strength, while dysprosium and terbium allow magnets to operate at high temperatures. These materials are used in robotics, industrial automation, data-centre cooling, drones, wind turbines, precision motors and defence equipment. Europe has started developing separation and magnet manufacturing capacity, although access to heavy rare earths remains its greatest weakness.
Non-Chinese supply carries a premium
The European market for technology materials is consequently developing around two distinct price levels: the international commodity price and a higher price for verified, non-Chinese and traceable supply. Semiconductor and defence customers have greater capacity to absorb that premium than mass-market manufacturers because raw materials account for a relatively small share of the value of their finished products.
