145 billion euros is how much the European initiative in the field of microprocessors and semiconductor technologies intends to invest in order to lead the EU semiconductor industry on the road to success. However, the industry is unlikely to achieve its goal with this alone. The key to success is the close co-operation with partners inside and outside the European Union (EU).

Europe should once again become the global centre of the semiconductor industry. This is the declared goal of the 19 member states that joined forces in 2020 to form the Semiconductor Alliance. The plan is to be realised with 145 billion euros in support and by promoting cooperation and investment in the development of advanced manufacturing and packaging technologies.

The initiative comes still on time, as European semiconductor manufacturers have been losing ground on the international market. And the trend seems to be moving further against Europe. While investment spending by the European semiconductor industry has stagnated at around four per cent of global spending, the Asia-Pacific region accounted for 63 per cent in 2019. Considering this large gap, it might be tempting to declare the semiconductor race lost. But Europe also has strengths that give cause for optimism.

Where Europe can score

Despite the low level of investment, the EU has a solid base in manufacturing, research and development of technologies and application-integrated components, which can be utilised to strengthen the European semiconductor industry. In combination with the relevant skilled labour, this provides a good starting point for scaling up a competitive industry. Important production centres in the EU include Austria, France, Italy, Ireland, the Netherlands and, of course, Germany, where another semiconductor hotspot has developing in Dresden.

SCHOLPP has been active in Dresden since the first lab was established in 1998 and, with its Cleanroom Move-In© concept, provides the hook-up for well-known international companies. Read more about our services and experience in this sector at Installation in cleanrooms.

What counts now

However, in order to become competitive in the long term, a broader production base with corresponding computing and storage capacity and the safeguarding of innovations is required. However, the lack of capacity in these areas is one of the EU’s weaknesses, which could become a risk to the entire industry.

As most modern semiconductors are produced in Taiwan and South Korea, there is a high risk of excessive dependence on these countries. Natural disasters, accidents such as the one in the Suez Canal or even political-military conflicts can abruptly interrupt international supply chains and bring the production lines of companies that specialise in just-in-time production to a standstill.

Reducing dependence on non-EU companies in the semiconductor sector would therefore not only be beneficial for the semiconductor industry, but also for the automotive industry and manufacturers of smartphones and notebooks. One possible solution could be the trend towards reshoring – e.g. in securing supply chains. As a professional in the field of reshoring, SCHOLPP is an experienced partner for many companies.

How the EU Semiconductor Initiative can support

The clear aim of the initiative must be to make European semiconductor manufacturers fit for international competition. The increase in investment expenditure in the EU is a clear indicator and decisive for the competitiveness of European companies. As they do not have the necessary resources, the 145 billion euros financial by the government support are indispensable. This is the only way to substantially increase the EU’s current four per cent share of total investment.

However, investment alone is not enough to turn the European players becoming globally competitive. In addition, a coordinated approach by European chip manufacturers and cooperation with technology companies from non-EU countries is required in order to shorten the development times for technologies and utilise resources sensibly. If they does not succeed, EU companies risk falling further behind their competitors from Taiwan and South Korea, despite the planned investments.

Accordingly, financial support from the EU and its member states will only lead to the desired success if there is a simultaneous transfer of technology between partners inside and outside the EU. Only in this way the semiconductor industry in the European Union can become a global player and contribute to securing the continent’s prosperity and innovative strength.