Electronics Weekly Electronics Design & Components Tech News
The EU has put forward a $52 billion Chips Act to hike European market share from 10% to 20%.
“We have calculated that we would need €500 billion investment in Europe to reach the 20% market share goal formulated in the EU Chips Act,” said Sievers , “reaching 20% world market share coming from 10% requires tripling or quadrupling our capacities.”
In the US the $250 billion Chips and Science Acts are paying 25% of the cost of new fabs. In Germany the authorities have agreed to 40% of the $17 billion cost of a pair of Intel fabs.
The EU has not revealed how it intends to fund the €52 billion Chips Act let alone €500 billion. Nor has it said how money will be allotted.
ST, NXP and Infineon, Europe’s big three chip companies have indicated, once again, that they don’t want to get involved.
Usually the EU come up with some insane plan such as they provide 10% of the funding and “industry” provides the other 90%. Things have moved on a long way from the 90s and it’s near 50-50 now.
But either way ST/NXP/Inf couldn’t afford it even if they wanted to be involved which is a pity as now is indeed the time to invest both in fabs and new IC designs so as to catch the very start of for the next upturn.
€500m doesn’t buy you much in the chip business these day, JPC, maybe an eighth of a packaging plant or a 20th of a fab.
As for capacity, the oversupply has just started in memory and may spread to other sectors – but it usually takes 18 months to go from the start of over-supply to the bottom of the market while it takes 2.5 years to build and equip a fab and get product out. So the bottom of the market looks like being in 2024 and fabs being built now will come on-stream in 2025 – just when the next upturn should be underway
Is “€500m” equivalent with “€500 billion” ?
Such an investment is quite foolish as oversupply is coming, for several years.