And then there is the European Commission's tendency to spread the butter too thin.
We've heard of Samsung's astronomical plans and have seen TSMC prepared to spend $30 billion for each giga-wafer fab, albeit over several years. But that €145 billion is intended for digital transformation across the whole continent, excluding the Brexiting United Kingdom of course. So maybe 80 percent of that money will go supporting software and Internet-mediated services and the remainder will have to be pushed towards a broad set of hardware claimants including electronic equipment, PCB makers and the whole electronics ecosystem. Then there is the multitude of flavors of semiconductor manufacturing, assembly, test and packaging that have to be more or less created from scratch. And just as China is finding very few chips get designed without the use of Cadence and Synopsys software, so Europe needs an entire EDA industry to be created for true strategic independence.
All too quickly the fund is doling out paltry amounts for highly specified projects and too much of the money is spent on administration and public relations.
And then there are the geographic interests. Malta and Cyprus have signed up to this joint-declaration not because they have a lot to contribute but because there might be European tax-payers' largesse for them. I doubt they will want to see the money spent exclusively in Grenoble, Munich, Dresden, Eindhoven or Leuven. From Estonia to Portugal and Finland to Greece there will be expectations of "involvement."
Which will lead to the classic European Commission problem of taking a large amount of money from the tax payers and then proceeding to spread it too thin to achieve anything.
More of what Europe's good at
The joint declaration makes the point that Europe is already good at a number of things in electronics including power electronics, RF technologies, smart sensors for embedded AI, microcontrollers, low-power technologies, secure components and semiconductor manufacturing equipment. We have the world-class ASML, a monopoly supplier of extreme ultra-violet lithography equipment. These are good starting points.
We also strong in industrial and automotive sector so we can capitalize on that. But it should also be remembered that not so long ago we were leaders in mobile telephony with Nokia and Ericsson handsets ruling the roost. It is easier to lose a market than gain one.
Which is why this initiative needs focus not on technology but on changing the cost of capital and the commercial landscape. If that can be done established companies will change their actions and startups will be formed. There is then some hope a semiconductor ecosystem has a chance to follow – but not in two or three years; more like two or three decades.
I give credit to the politicians for recognizing that as the Covid-19 pandemic has lowered barriers and created an opportunity. I give credit to the politicians for having ambition.
But they have so far done nothing to change the commercial dynamic that blighted previous initiatives and killed off multi-company fab initiatives, such as those that helped establish Crolles.
Next: Legislate and let the money flow