Europe will try to rebuild semiconductor capability using pandemic recovery funds

December 08, 2020 // By Peter Clarke
Europe moves to build up chip sector using pandemic recovery funds
The leading nations of Europe have signed a commitment to invest in local design and production of processors and semiconductors and have up to €145 billion to spend.

A 2025 time line is being set for Europe to come up with its own leading-edge processor chips with a "significant improvement in energy performance and speed," to quote from a joint declaration.

So far Germany, France, Italy, Belgium, The Netherlands and twelve other countries have signed up to bolster Europe’s electronics and embedded systems value chain. This will include a particular effort to reinforce the processor and semiconductor ecosystem to address security issues. The United Kingdom is the notable exception from the list but it has already left the European Union and is on the brink of leaving its transitionary period at the end of 2020.

The joint-declaration comes after the European Union and individual nations have already been making some moves in this area (see Germany pushes for more semiconductor independence from US, China, European processor startup gets €6.2 million kickstart grant and Low-cost European FPGA launched with IPCEI support). With the signing of the joint declaration the movement appears to be gaining momentum.

And the impetus for the movement is security of supply after a year in which problems of supply chain fragiity have been seen after decades of globalization.

Europe bought less than 10 percent of the world's semiconductor output in 2019 – $39.82 billion out of global sales of $412.31 billion (see WSTS raises chip market forecast for 20/21). However, in terms of manufacturing of chips Europe runs a massive deficit, especially at the leading-edge

As long ago as 2014 Europe's presence in 300mm wafer chip manufacturing was 2 percent by ownership and less than 1 percent by location (see Europe's 300mm IC manufacturing falls below 1% of world output). At the same time South Korea and Taiwan – with the likes of Samsung and Taiwan Semiconductor Manufacturing Co. Ltd. – hosted 50 percent of the 300mm wafer capacity in aggregate. The situation will have deteriorated over the following years and the vulnerability of global supply chains has been highlighted by the Covid-19 pandemic.

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