Technology: The European Commission regrets that “entire production chains” are being slowed down by the lack of semiconductors.


Liam Tung

Monday, September 20, 2021

The European Commission will soon present its microchip law, a plan to reduce the supply chain’s dependence on chipmakers located in Asia.

The plan was detailed by Commission President Ursula von der Leyen during the State of the Union address.

“The aim is to jointly create a cutting-edge European ecosystem for chips, especially in terms of production,” she said. “This will ensure our security of supply and allow the development of new markets for cutting-edge European technologies. “

In March, the European Commission unveiled its Digital Compass, which aims to make the EU digitally sovereign by 2030, increasing its share of the global semiconductor supply from 9% to 20% . The EU also indicated last May that it planned to create an industrial alliance to face global competition.

“Entire production lines are already operating at reduced speed – despite growing demand – due to a shortage of semiconductors,” recalls Ursula von der Leyen. “But as global demand has exploded, Europe’s share of the entire value chain, from design to manufacturing capacity, has shrunk. We depend on state-of-the-art chips made in Asia. It is therefore not just a question of competitiveness. It is also a question of technological sovereignty, ”she says.

The Commission President concedes, however, that it will not be easy to reach this level. “Yes, it is a tough task. And I know that some people claim that it is not feasible, ”she emphasizes.

The United States did not do much better than the EU during this period. The Semiconductor Industry Association (SIA) recently noted that the 37% share of global chip manufacturing capacity held by the United States in 1990 has fallen to 12% today. Asia dominates semiconductor manufacturing and technology, thanks in large part to Taiwanese founder TSMC, and Samsung in South Korea.

Intel counts Qualcomm and Amazon Web Services among its first customers. The company, which also signed a major chip manufacturing contract with the Pentagon last month, has also made overtures to the European Commission, saying the company will spend billions on two new chip manufacturing facilities. on the Old Continent, and up to 80 billion euros in expansion over the next decade, to support the Commission’s digital plan.

The EU’s microchip plan follows the US Senate’s passage of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) law in July, with a budget of $ 50 billion to invest in manufacturing semi -conductors and research. He has yet to gain the support of the House of Representatives.

The production of automakers in the United States and Europe has been severely limited due to the chip shortage since the start of the pandemic. As Gartner analyst Alan Priestley recently told CNBC, the global chip shortage has been made worse for automakers, as they tend to use chips made in older manufacturing processes, while manufacturers of chips are investing in higher revenue chip production capabilities, built using newer processes. Automobiles, for example, only account for 4% of TSMC’s quarterly revenue, while chips for smartphone makers like Apple account for about half of its revenue.

Intel is expected to announce new chip manufacturing facilities in Europe by the end of the year. The founder …

Digital transformation
Computer science


Liam Tung

Monday, September 20, 2021

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