Fab For Europe

The EU’s iffy decision-making has been nowhere more apparent than in its dealings with the semiconductor industry.

Seven years ago the EU adopted its 10/100/20 plan to boost its semiconductor market share which was then standing at 9%.

The 10 stood for €10 billion in public/private research funding, the 100 stood for the €100 billion to be spent by industry on manufacturing and 20 was the 20% market share to be achieved by 2025.

$80 billion in funding was earmarked by Commissioner Neelie Kroes to fund the project.

Kroes had urged the EU semi Big Three companies to implement the plan but said that, if they wouldn’t, then other companies would be brought in.

Kroes left the EC in 2014 and the Big Three declined to pursue the 10/100/20 project, but  the project wasn’t offered to any other company – somehow the money got re-routed to the industry without any obligation to deliver 20% market share.

The will of the EU to revive semiconductor manufacturing in Europe had been subverted by the lobbying power of the Big Three.

If the EU had stuck to its guns in 2014, then the interim goal of 18% market share by 2020 might well have been reached by now, there would not be a chip shortage crisis for Europe’s car industry and the EU would not have had to devise last year’s $145 billion plan to increase Europe’s current 10% semiconductor market share.

This time round, under the 2020 plan, there is talk of asking TSMC and Samsung to build a fab in Europe though this, in an industry which characterises a company’s nationality by where it is headquartered, would improve the market shares of Taiwan and Korea rather than Europe.

A more enlightened use for the EU’s $145 billion would be to enlist the services of its pre-eminent semiconductor technology houses – Imec, ASML, Leti and Fraunhofer – and enlist Applied, Tokyo Electron and whichever equipment companies are needed to build a fab in Europe. Specific processes could be licensed. 

In this way Europe could get controlled access to advanced semiconductor technology which every major regional bloc is beginning to realise is essential for its industrial independence.


Comments

4 comments

  1. Funny (or sad) how it is coming full circle. Didn’t TSMC technology orginally come from Signetics->Philips before it became NXP ? I think Philips did well out of their shareholding in TSMC. We still have excellent expertise in Europe such as IMEC. Europe needs to capitalise on this before we lose critical mass and it’s too late.

  2. I was also at the Imec 2014 conference Chris, and that is not my recollection at all. Kroes is not a technologist but she stated the case for investing in European semiconductors as a politician would.
    “Last September we set up the European Leaders Group (ELG) and asked them for a strategic roadmap so we can double semiconductor output and they delivered that in February,” said Kroes at the conference, “most people prefer flowers or chocolates but I was delighted with this present. I’m expecting a more detailed implementation plan at the end of this month. Europe needs the capacity to design and manufacture electronic components, that needs to have demand from end-users which we are also supporting. We are not putting in over-capacity, but if we wait for the demand we will be too late. Do we have the creativity, the energy and the ambition to lead the world? We do.”
    As an influential politician with enthusiasm and ambition for the European semiconductor industry it would be hard to find anyone better.

    • I was at that IMEC event and my memory backs David’s notes. She was enthusiastic and wanted Europe to compete. However, her European Leaders Group (ELG) gave the impression that they were more concerned about feathering their individual companies’ nests than working together. As I recall their response was to say, effectively, that there was no point in creating new mechanisms but just give us the money to continue to bumble along as we are.

      • Obliged for the endorsement, Dick, and you’re correct about the duplicitousness of the ELG – they played along with Kroes until her term of office was up then persuaded the EC to hand over the €80 billion with no strings attached. I suspect the SIA are up to the same trick in the USA.

  3. In 30 years in the semiconductor industry I have never encountered an official so manifestly unimpressive and poorly briefed as Neelie Kroes, when she presented the 10/100/20 program at the IMEC Conference in 2014. Mumbling from ill prepared paper notes, her rambling error ridden talk was a perfect contrast to the vivid presentations that preceded her “keynote” from industry professionals.

    It was obvious that she would fail miserably and she did not disappoint. Unfortunately the dilemma of semiconductor dependence continues for Europe, with no coherent solution in sight. Meanwhile, the EU Horizon 2018-2020 programs chunter on, no doubt accompanied by world leading canapes and champagne receptions (in better times), devoid of any solutions to rectifying the European Semiconductor supply imbalance.

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