Thu, May 06, 2021 page10

• EU official stresses need to secure chip production

  • Bloomberg and Reuters
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  Europe was naive to outsource so much of its semiconductor design and manufacturing in the past few decades, a top government official said, ahead of unveiling more details around plans to double the region’s chip production by 2030.

  European Commissioner for Internal Market Thierry Breton said it was possible to redress the imbalance, and the global chip shortage hobbling automakers and electronics suppliers was evidence that now is the time to act.

  “We want to come back to our former market share of production for the needs of our industry,” said Breton, a former chief executive of French IT giant Atos SE and France Telecom SA.

  

  European Commissioner for Internal Market Thierry Breton attends a debate on European Defense Fund during a plenary session of the European Parliament in Brussels on Thursday last week.

  Photo: EPA-EFE

  Europe’s share of semiconductor manufacturing has dropped over the years because the region has been “too naive, too open,” he said in an interview.

  The European Commission was yesterday to announce more details about a strategy announced in March to double production to at least 20 percent of the world’s chips by 2030.

  It would involve creating an industry alliance of Europe’s leading semiconductor companies and research centers, as well as more than a dozen EU governments, Breton said.

  At least 22 countries have already signed a letter of intent.

  The alliance of European players would have to decide how to boost the design and production of 20-nanometer to 10-nanometer chips, which are smaller and more powerful than most currently manufactured in Europe, Breton said, without offering a timeline.

  In parallel, the EU is to work on plans to produce the next generation of leading-edge chips by 2030.

  Officials are targeting production below 5-nanometers down to 2-nanometers, an ambitious goal not yet reached by industry leaders Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and South Korea’s Samsung Electronics Co.

  Franco-Italian chipmaker STMicroelectronics NV sees no reason to join the potential semiconductors alliance, CEO Jean-Marc Chery said on Tuesday.

  The European Commission’s initiative is a positive development, Chery told BFM Business, but added that his firm had no interest in taking part.

  Chery said he expects the chip shortage is not about to end.

  “The imbalance between demand and capacity is such that this will last at least a year,” he said.

  STMicro produces a wide range of chips, from low-margin microcontrollers to more sophisticated sensors used in smartphones and autonomous vehicles.

  For years, Europe accounted for a major chunk of global semiconductor manufacturing. In 1990, capacity reached about 44 percent, but it is now closer to 10 percent.

  Taiwan, South Korea and Japan account for about 60 percent of production, according to Boston Consulting Group and the Semiconductor Industry Association.

  European chip designers, including NXP Semiconductors NV and Infineon Technologies AG, outsource most production to TSMC and other foundry operators.

  Europe’s decline in consumer technology, such as the failure of Nokia Corp and Ericsson AB’s once-popular mobile phones, is partly to blame for the supply chain shift, said Jan-Peter Kleinhans, head of technology and geopolitics at think tank Stiftung Neue Verantwortung.
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