BRUSSELS, Belgium – The European Commission has launched a campaign of public investment in micro- and nanoelectronics with the aim of doubling chip production on the continent to around 20 percent of global production.
The plan is to channel more than 5 billion euro (about $6.4 billion) of public authority money into research, development and innovation over the next seven years to match a similar amount of investment from the companies supported by the plan. However, the spending is likely to be spread across the whole semiconductor supply chain and cannot be used to simply lower the cost of capital or buy production equipment due to anti-subsidy commitments.
European Commission vice president Neelie Kroes said: "Others are aggressively investing in computer chips and Europe cannot be left behind. We have to reinforce and connect our existing strongholds and develop new strengths. A rapid and strong coordination of public investment at EU, member state and regional level is needed to ensure that transformation."
Kroes, who is responsible for digital economy and services delivery in Europe, has argued for several years that nanoelectronics is strategic to European wealth creation as a least 10 percent of GDP depends on electronic products and services.
Kroes said that the public authorities across Europe, at the Commission, member state and regional level should be able to channel more than 5 billion euro (about $6.4 billion) into research, development an innovation over the next seven years. "This is what will attract not only a similar amount of investment in research and innovation by industry but also the 100 billion euro that industry has committed to invest in Europe if we are able to get our act together," Kroes said in the text of a speech to launch the initiative.
"I want Europe to produce more chips in Europe than the United States produces domestically. It's a realistic goal if we channel our investments properly," Kroes said. The industrial strategy will focus on larger investments to reinforce Europe's semiconductor centers in Dresden, Eindoven, Leuven and Grenoble and their connections to design clusters in such places as Cambridge and Milan.
"If we don't take this opportunity, if we don't connect our strongholds, then others will leapfrog us. So we need this public investment - we need it to be rapid, strategic and coordinated. I will expect great things from the industry; they will have to build on this investment to take the sector to new heights. They will have to find ways to repeat the success of Airbus, but this time in the chip sector, and with its own unique business model," Kroes said.
The strategy will cover making chips at the leading edge (More Moore) as well as more varied (More than Moore) and the transition to production on 450-mm diameter wafers.
In support of Kroes' ambitions the Commission referenced a positioning document entitled Innovation for the future of Europe: Nanoelectronics beyond 2020 that described how to secure a European nanoelectronics industry and which outlined how a total investment of 100 billion euro could be delivered between 2013 and 2020.
European engineers usually don't. At least that's my experience.
Anyway, leading edge fabs are highly automated which means that factors like cost of capital, up time for the machinery and infrastructure, strict process control and taxes probably influence the profitability more than the wages of the process technicians and engineers.
The main reason that TSMC is TSMC is because they seem to manage those parts better than anyone else. That europe/Japan/US besides Intel fail to compete in those terms in leading edge digital is where the problems are located. Problems that unfortunately is much more tricky to fix than making the fab-workers into serfs.
Innovation, Creativity, Information and Education are the only way that anything like this will succeed. Already there are too many industry "geniuses" that have led us down the garden path with innovations that will go nowhere or have gone nowhere (like EUV (Hey 15nm is still X-Ray)) that are certainly sucking a lot of money away from anything meaningful like is being suggested. If Europe wants to pull this off, they will actually have to put their pride on the shelf and actually cooperate with each other in a meaningful way. Not at the executive level but at the technology level. Put the money into education and the creation of the next generation of engineers who are all ready to 'become'. They have grown up in the age of "information overload" and know how to handle it better than those of us who started in this industry way too many years ago. Companies should 'sponsor' or pay for the education of the best and the brightest and then put them to work on the future as soon as they graduate instead of letting them flounder in the abyss of unemployment because companies are to cheap to pay them, too cautious to hire them and so interested in today's bottom line that they lose sight of their futures. Through cooperation comes innovation and new ideas are born from education and creativity. As a US chip guy, I would like to see Europe pull it off, but I think the 500 pound (Chinese) Gorilla has already gotten a huge head start on what is being suggested and are not going to back off any time soon to let others take their share of the prize. It may be too little too late but that doesn't mean Europe should give up. They just need to be more creative in the way this is planned and the way it is executed; not business as usual and 'same old - same old" as has been the case for years.
You might be right concerning 'burning' tax money, but do you think that there is no growth in the chip industry? IT consulting as European strategy??! How many employment opportunities is going to generate?
I hope something good arise from the proposed investments. I'm into hardware and want to stay in europe.
It will get tricky though. The big players (ST, NXP, Infineon) have a strategy of outsourcing leeding edge manufacturing to Taiwan. Infineon fabricate power semis successfully, ST analog/MEMS successfully and NXP is reducing their debt. Neither of these really need the most modern facilities to do that. They can basically fabricate what they specialize in in legacy fabs while letting the asians do the heavy tech investments in capacity for digital. That's the whole idea behind the fab lite strategy.
The big players really would have to realign their business models if europe is supposed to increase their share of manufacturing capacity. I don't see that happening, unfortunately.
What happens with design is that the good ideas and good engineers tend to relocate to the US (better financing, it seems like), feeding the US high tech sector. Guess that could change but it's unlikely.
Anyway, there is no fundamental reason why we shouldn't be successful in high end electronics so I hope we will all be surprised when we look back in ten years.
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