European semiconductor companies are well positioned to compete with the United States and Asia in robotics and physical artificial intelligence, building on their established strengths in automotive and industrial technology, the chief executives of Infineon, STMicroelectronics and NXP now say.
As artificial intelligence moves beyond data centres into robots, vehicles and industrial machinery, demand is expected to increase for semiconductors, sensors and computing systems capable of operating safely and reliably in physical environments, the executives told an industry gathering in Munich.
The three companies are major suppliers of power semiconductors, sensors and microcontrollers used in industrial automation, automotive systems and robotics. They compete with U.S. chipmakers including Texas Instruments (TXN.O) and onsemi (ON.O).
“For me, industrial AI or physical AI is, first of all, a must win for Europe,” Infineon CEO Jochen Hanebeck said. “There are so many topics where we feel that we are second to other regions.”
Europe has an established industrial automation market that could provide a foundation for developing physical AI technologies. The International Federation of Robotics said Western Europe had a record 267 industrial robots per 10,000 manufacturing employees in 2024, compared with 204 in North America and 131 in Asia.
Germany, Europe’s largest manufacturing economy, ranked third globally with 449 robots per 10,000 manufacturing employees, highlighting the region’s existing industrial automation capabilities.
However, the global robotics market remains heavily concentrated in Asia. Worldwide installations of industrial robots reached 542,000 in 2024, with Asia accounting for 74% of new deployments, compared with 16% in Europe and 9% in the Americas, according to the International Federation of Robotics. China alone accounted for 295,000 installations.
European installations fell 8% to 85,006 units in 2024, although the figure was the region’s second-highest on record.
STMicroelectronics CEO Jean-Marc Chery said developing physical AI would require close cooperation between semiconductor manufacturers and their customers, including training robots in simulated environments before deploying them in factories.
ST has agreed to introduce humanoid robots developed by Italian robotics company Oversonic into its factories, with the first already installed at a semiconductor manufacturing plant in Malta.
Most such deployments remain at an early stage, with factory trials more common than widespread commercial adoption.
Rafael Sotomayor, CEO of NXP, said Europe’s historical strengths in automotive and industrial technology could help it develop the safety and reliability systems needed as artificial intelligence moves from generating recommendations to taking physical action.
“There’s no undo for a broken bone if you make a wrong decision,” Sotomayor said.
The shift towards physical AI is also increasing the strategic importance of semiconductor manufacturing and supply chains. Chips underpin the sensors, processors and control systems that allow machines to perceive their surroundings, process information and respond to changing conditions.
The European Union currently produces less than 10% of the world’s semiconductors, despite accounting for 10.5% of global chip shipments through consumption. Its European Chips Act aims to increase the bloc’s share of global semiconductor production to 20% by 2030, according to the European Council.
The European Commission has also proposed a second Chips Act to strengthen the region’s semiconductor industry and reduce reliance on foreign suppliers.
The challenge for European manufacturers will be translating their existing expertise in industrial and automotive semiconductors into competitive AI systems as U.S. and Asian companies expand investments in robotics, advanced computing and artificial intelligence.
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Faustine Ngila is the AI Editor at Impact Newswire, based in Nairobi, Kenya. He is an award-winning journalist specializing in artificial intelligence, blockchain, and emerging technologies.
He previously worked as a global technology reporter at Quartz in New York and Digital Frontier in London, where he covered innovation, startups, and the global digital economy.
With years of experience reporting on cutting-edge technologies, Faustine focuses on AI developments, industry trends, and the impact of technology on society.
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