ANALYSIS Two unrelated €40 million commitments landing days apart trace the outline of a European push to build sovereign capacity not just in chip fabrication but across the AI hardware chain, from design automation to the optical components that move data inside devices and data centers.
Why it matters
Europe's semiconductor conversation has long centered on ASML and the fabs it equips. These two moves extend the aperture. NADI, the Netherlands' newly established innovation agency, and Germany's SPRIND have committed €40 million to an AI-Native Chip Design Challenge aimed at cutting chip development timelines "from years to weeks"2. Separately, Morphotonics, a Dutch nanoimprint lithography company based in Veldhoven, closed a €40 million-plus Series B to scale waveguide manufacturing for AI glasses and expand into optical components for data centers1,4. ◆ Together, the two rounds amount to a coordinated, if unplanned, investment thesis: Europe can compete in AI hardware by owning the tooling layers that sit above and below the fab.
The big picture
The NADI-SPRIND challenge is the first joint-funding initiative between the two agencies7. NADI, a major initiative of the Dutch Ministry of Economic Affairs, was formally announced on 15 September 2026 and is modeled after SPRIND, ARPAs, and the UK's ARIA. The Dutch government has allocated €500 million to NADI, and the influential Wennink Report, led by former ASML CEO Peter Wennink, recommended a minimum commitment of €1.5–2 billion for the agency's deployment budget. SPRIND's own Challenges model has committed more than €100 million across Europe this year. Earlier in 2026, SPRIND launched its first joint Challenge with Sweden's Vinnova.
"The launch of NADI's first programme is a huge statement of Europe's intent to combine two of the continent's greatest strengths: collaboration and innovation," said Jano Costard, Head of Challenges at SPRIND. The chip-design challenge will run across two stages over 20 months: Stage 1, from November to July 2027, will select seven teams, each receiving €2.6 million; Stage 2 will shortlist three teams to receive €7 million each.
Morphotonics occupies a different layer of the stack. Founded in 2014 by engineers who spun out of Philips' optical-disc division, the company makes equipment that manufactures waveguides, the transparent optical components that project digital images into a wearer's field of vision in devices like Meta's Ray-Ban Display3. Its nanoimprint lithography process uses a mold to press nano- and microscopic patterns into a liquid resin coating before hardening them with UV light. The company's revenue tripled in 2025 compared with 2024. Its Series B, the largest raise in the company's history, was backed by 3M Ventures, Innovation Industries, BOM, Invest-NL, the EIC Fund, Ernij Next, and the European Investment Bank.
ANALYSIS The two funding events share more than a headline number. Both draw on the same Dutch institutional infrastructure: NADI is backed by the Ministry of Economic Affairs; Morphotonics counts Invest-NL and the EIC Fund among its investors. Morphotonics is based in Veldhoven and has said it benefits from ASML's supply chain and uses many of the same vendors.
The strategic logic also converges. The NADI-SPRIND challenge targets the front end of the chip lifecycle, where design cycles measured in years constrain how quickly European firms can bring custom silicon to market. Morphotonics targets a back-end bottleneck: waveguides remain the costliest component in AI glasses, and existing production methods are "slow, expensive and difficult to adapt to different optical designs". Morphotonics plans to use the new funding to increase production capacity for its Cypris platform, advance product development, and grow its engineering and commercial teams. It is also pushing into optical technologies for data-center infrastructure, a market adjacent to but distinct from consumer AR.
The SPRIND network's expansion pace is notable. With joint challenges now running alongside Vinnova and NADI, and collaborative relationships with ARPAs and the US National Science Foundation, SPRIND is assembling a pan-European funding architecture that no single national program could replicate.
What's next
The chip-design challenge opens for applications ahead of Stage 1 in November, with further financing details still to be confirmed. Morphotonics, already working with device and component manufacturers in China, Taiwan, the US, and Europe, will use its Series B to build out after-sales infrastructure and strengthen supplier networks. NADI itself remains in the process of formal establishment; the gap between its current €500 million allocation and the Wennink Report's recommended €1.5–2 billion floor will be an early test of Dutch political commitment.