EU funding not enough to reach 20% global target • The Register

EU funding to boost the region’s semiconductor industry under the European Chips Act falls far short of meeting 2030 targets, according to the head of one of the world’s largest chip companies.

asml construction site near headquarters in Veldhoven, Netherlands last year (May 2020)

A ray of hope in Europe’s chip ambitions: ASML, the world’s largest provider of lithography systems for chip manufacturers, continues to grow

The warning comes from Kurt Sievers, chief executive of Dutch chipmaker NXP Semiconductors, who said the EU simply doesn’t want to meet its self-proclaimed target of 20 percent share of the global semiconductor market by 2030 with the amount of money it plans to invest in the semiconductor industry.

Speaking at the Global Foundries Technical Summit in Dresden, Germany, Sievers said that hundreds of billions of euros would be needed to reach that goal, much more than the proposed 43 billion euros ($42 billion), according to Politico. when the European chip law was announced in February.

“We calculated that we would need investments of 500 billion euros in Europe to achieve the target of 20 percent market share formulated in the EU chip law,” says the head of NXP, which produces NFC chips for many of the contactless tickets manufactured in Europe as said quoted.

Reaching 20 percent of the global semiconductor market, up from the 10 percent estimated today, would require tripling or quadrupling the chip manufacturing capacity represented in EU countries, a daunting task, especially given the ambitious expansion plans of chipmakers like TSMC in other parts of the world.

Andrew Buss, research director for European enterprise infrastructure at IDC, said he agrees that the current supply of financing seems a little low, but with a company of this type it’s important to start somewhere.

“Once it starts, you soon see things happening,” he said, noting the US government’s US CHIPS bill, which has already proven successful in spurring an ambitious program to overhaul its own semiconductor industry.

But building a credible world-class semiconductor industry requires more than just pouring money into the sector, he adds, calling for careful planning to provide the skills needed to develop advanced semiconductors, as well as developing Europe’s own manufacturing processes rather than to rely on companies like Intel and TSMC to build chip manufacturing facilities here, as is done with Intel in Magdeburg, Germany.

“Reaching 20 percent of the global semiconductor market would be a challenge no matter how much money you spend on it,” said Buss.

However, Europe has an edge in its favor and that is the presence in the region of ASML, a key supplier of vital equipment needed for semiconductor manufacturing, Buss added.

The level of investment provided by governments to stimulate chip manufacturing has been questioned before, with Richard Gordon, Gartner’s vice president of semiconductors and electronics, pointing out that even investment under the US CHIPS Act is likely to be insufficient.

“$52 billion is a drop in the ocean compared to what semiconductor companies like Samsung and Intel themselves plan to invest over the next decade. It’s hundreds of billions. I don’t think people realize how much investment it takes to make chips,” he said. ® EU funding not enough to reach 20% global target • The Register

Rick Schindler

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