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.
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.
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
Video streaming giant Netflix is launching a talent cultivation program in Taiwan aimed at producing high-quality Mandarin content, the company announced in a press release on Thursday. Netflix Chinese language content head Maya Huang (黃怡玫) said that Netflix has long invested in the Taiwanese market, citing the Netflix Fund for Creative Equity launched last year as an example. The fund would continue to dedicate resources to discovering content with the potential to be developed into Chinese-language projects, she added. The financing for the new talent projects seeks to create an ecosystem for content creators and professional development programs, she said. The talent projects
APPRECIATION: The central bank stepped in to stabilize the NT dollar after a surge in foreign institutional investment, triggered by optimism about tariffs and US Fed policy Taiwan’s foreign exchange reserves hit a record high at the end of last month, as the central bank intervened in the currency market to curb the New Taiwan dollar’s appreciation against the US dollar. Foreign exchange reserves increased by US$5.48 billion from May, reaching an all-time high of US$598.43 billion, the central bank said on Friday. While the central bank did not disclose the scale of its intervention, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said that the currency market remained relatively stable until the middle of last month. However, a shift occurred following the US Federal Reserve’s signal of a