April 24, 2025 EUV Lithography: Energy & Geopolitics in Transition

Manufacturers should understand how energy demands and global uncertainty are reshaping the future of EUV lithography.

By Stephen J. Kudla

Extreme Ultraviolet (EUV) lithography is an essential technology driving the next generation of semiconductor manufacturing. It makes it possible to produce smaller, more powerful chips used in everything from smartphones to servers. As demand for advanced electronics grows, EUV has become a key enabler of continued progress in chip performance and miniaturization.

However, EUV systems are notoriously energy-intensive, raising serious concerns as manufacturers face rising energy costs and pressure to meet stricter environmental standards. Simultaneously, geopolitical tensions—particularly involving China—are pushing companies to rethink where and how they manufacture and protect their innovations. Companies intending to develop/refine EUV systems should consider shifting their patent strategies toward energy efficiency and filing in jurisdictions that offer both regulatory stability and long-term manufacturing security.

Energy Demand Complications

EUV lithography systems consume around 1,400 kW of power—similar to that of a small city—raising concerns about semiconductor fabs’ growing energy demands. As EUV adoption increases with smaller nodes, these facilities’ energy use is expected to rise sharply, often relying on non-renewable sources and driving up carbon emissions.

As global pressure for sustainability grows, semiconductor manufacturers face increasing demands to reduce energy use—especially in energy-intensive EUV lithography. Countries like Vietnam and Malaysia are enacting strict environmental regulations and offering incentives for cleaner technologies, while U.S. programs encourage energy-efficient manufacturing. These trends are pushing fabs to prioritize energy-saving innovations and green IP strategies. 

In response to such mounting pressures, some companies may consider shifting from EUV lithography to alternatives like nanoimprint or direct-write technologies. While these offer potential advantages, they also come with substantial energy demands —particularly as they scale for high-volume production. Ultimately, any advanced lithography technique at smaller nodes will require significant power, making energy-efficient EUV improvements a more immediate and viable solution.

Some companies hope future grid upgrades or renewable energy will offset EUV’s power demands, but grid reliability and scalability remain uncertain in many growing regions. Relying solely on future infrastructure is risky—fabs must focus now on cutting energy use within existing systems.

Geopolitical Tensions Causing Production Shifts

Amid this shift for sustainability, the global semiconductor landscape has been deeply affected by geopolitical tensions. The Russia-Ukraine war, for instance, disrupted the supply of vital raw materials such as neon gas. Rising tensions between the U.S. and China have caused manufacturing and research facility realignment as companies look to mitigate risks associated with over-reliance on high-risk regions. The pandemic’s semiconductor chip shortage further highlighted the significant vulnerabilities in the global supply chain. Mounting pressures prompt companies to consider reshoring operations to more stable regions.

Specifically, the U.S.’ recent tariff policies, particularly with China, will likely have significant ripple effects across the semiconductor industry. These tariffs could further accelerate the reshoring of semiconductor production to the U.S. and allied nations, prompting companies to invest more heavily domestically or in other less volatile regions. Such shifts may increase production costs, potentially straining resources in energy-intensive processes like EUV lithography. Thus, tariffs could also inadvertently push companies to fast-track innovations in energy efficiency to offset rising operational expenses and comply with U.S. energy regulations.

However, China’s reciprocal tariff policies—particularly the exemptions granted to U.S. chipmakers that outsource manufacturing—could significantly undermine the U.S.’ efforts to stimulate domestic semiconductor production. By effectively shielding companies that rely on overseas fabrication, these exemptions create a loophole allowing U.S. producers to maintain global supply chain operations without fully absorbing the cost pressures of the trade conflict. As a result, U.S. firms may double down on offshore production, especially in places like Taiwan or South Korea, despite the policy intentions behind tariffs and longer-term incentives like the CHIPS Act. Thus, instead of bolstering domestic capacity, the current tariff back-and-forth may inadvertently perpetuate reliance on complex, globalized supply chains while simultaneously driving up prices and destabilizing an already strained semiconductor ecosystem.

Many semiconductor companies are shifting their operations out of riskier regions to diversify their supply chains and production hubs. For example, Southeast Asian countries have emerged as increasingly important hotspots for semiconductor manufacturing due to favorable regulatory environments and lower geopolitical friction. Several leading semiconductor companies have adjusted their footprints. Vietnam now hosts major chip facilities from Intel, Amkor, and Hana Micron, with investments topping $3.5 billion. Malaysia is also attracting semiconductor investment, including ASE Technology and Neways expansions. These and other emerging markets are gaining ground as key players in the global supply chain, driven by risk diversification.

Patent Implications

As semiconductor companies navigate this changing landscape, their patent strategies will likely be increasingly influenced by energy efficiency concerns and global political dynamics. These intersecting pressures will likely push semiconductor companies to prioritize patents for energy-saving solutions in EUV systems that align with sustainability goals in their manufacturing jurisdictions of interest. By focusing on energy efficiency, manufacturers can position themselves as leaders in sustainability while tapping into emerging markets where eco-friendly practices are becoming an innovation driver.

Importantly, securing patent protection across key manufacturing regions remains a critical strategy. As countries like Taiwan and Malaysia grow in prominence due to political stability and favorable regulations, establishing strong patent rights in these locations helps companies stay ahead of competitors looking to capitalize on the same advantages. At the same time, obtaining/maintaining patent coverage in major markets such as South Korea, China, Europe, and the U.S. ensures that valuable, energy-saving innovations aren’t simply exported to other manufacturing jurisdictions—safeguarding both competitive edge and long-term investment in R&D.

Overall, such a diversified patent portfolio helps preserve market positioning amid shifting political landscapes and enables companies to engage in licensing or cross-licensing strategies that can sustain revenue even when direct access to certain markets is curtailed or unfavorable. This approach is particularly vital in high-tech sectors, where maintaining control over proprietary innovations is essential for long-term competitiveness in an increasingly fragmented global trade environment.

As the semiconductor industry faces a growing convergence of energy efficiency concerns and geopolitical volatility, EUV lithography stands at a crossroads. While the technology continues to be a cornerstone of advanced manufacturing, the mounting pressure to reduce energy consumption and mitigate political risks calls for a strategic reassessment of patent strategies. Companies focusing on improving EUV’s energy efficiency while securing patent rights in major manufacturing regions are positioning themselves to comply with emerging environmental regulations and secure a competitive edge in an increasingly volatile global market.

About the Author:
Stephen J. Kudla is a partner and patent attorney at the Chicago-based intellectual property law firm Marshall, Gerstein & Borun LLP. He counsels clients on matters dealing with the most innovative technologies hitting the market and has extensive experience in guiding manufacturers in securing their intellectual property protection. Connect with him on LinkedIn at https://www.linkedin.com/in/stephen-kudla-0b633592/.

DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney. Views expressed are those of the author and are not to be attributed to Marshall, Gerstein & Borun LLP or any of its former, present, or future clients.

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