Semiconductor Industry Calls for Stronger European Strategy

[Nomad76]

Seeking to explore semiconductor policy measures that can strengthen the industrial policy in the European Union, SEMI and the European Semiconductor Industry Association (ESIA) have successfully held a high-level roundtable event in the European Parliament under the auspices of Members of the European Parliament (MEPs) Bart Groothuis (Renew Europe), Oliver Schenk (European People's Party) and Dan Nica (Socialists and Democrats Party).

The 2023 European Chips Act marked an important milestone for Europe's semiconductor industry and overall industrial ecosystem, providing concrete measures to enhance competitiveness and technological capabilities. In order to build on the success of the Chips Act, after the roundtable, MEPs signed a joint declaration to the European Commission's Executive Vice President for Tech Sovereignty, Security and Democracy, Henna Virkkunen, calling for an ambitious follow-up to the Chips Act that adds new research and development (R&D) funds, attracts new investments, and increases European competitiveness.

"The creation of a new European semiconductor strategy was a focal point of the discussion today, emphasizing on the increasing need to boost the technological capabilities and accelerate innovation across the European semiconductor ecosystem," said Laith Altimime, President, SEMI Europe.

SEMI and ESIA strongly appreciate the ongoing initiatives of European policymakers, together with the progress already made to bolster the European semiconductor ecosystem. Nevertheless, considering the existing concerns and challenges of our industry raised today, the European semiconductor ecosystem requires a holistic approach that decisively supports semiconductor design and manufacturing, R&D, materials and equipment capabilities.

ESIA Vice-President Frédérique Le Grevès underlined: "Our sector sees three priorities: We need a clear European semiconductor strategy that is backed by a revised European Chips Act with more quickly advancing administrative procedures. Secondly, we must identify the right approach to trade and foreign policy leading to more resilience, and thirdly, continue our focus on fostering innovation."

SEMI and ESIA will continue to engage with relevant policymakers and stakeholders to create a policy framework that can strengthen the entire European semiconductor supply chain while preserving technological competitiveness.

View at TechPowerUp Main Site | Source

 

[Assimilator]

Chipmaking, at least on a TSMC level, is simply not gonna happen in the EU unless they subsidise the f**k out of it, because labour cost is just too high compared to the Far East. The EU needs to stop pussyfooting around this and just put up the damn money.

 

[R0H1T]

Maybe they will after seeing the Orange one across the Atlantic basically redrawing the entire Globe with his sharpie, or autopen

 

[Daven]

This is an artificially created problem as the world moves back to isolationism. Sure there was a shortage due to Covid shutdowns and the increased use of semiconductors in more and more places. But the response was move to the far right, punish everyone through tariffs and become increasingly nationalistic.

Also the world already has a lot of fabs outside of Taiwan. It’s just that they were all owned by a single company that only made their own chips. These chips were in such low demand (only useful in desktops and laptops) that fab capacity was wasted and the company couldn’t advance their nodes due to lower and lower revenues.

End all tariffs, tell China to grow up and force Intel to become a fab-for-hire only company. Problem solved. Lol!

 

[phanbuey]

Maybe they will after seeing the Orange one across the Atlantic basically redrawing the entire Globe with his sharpie, or autopen

When is the last time you said THANK YOU!?!? dO It NoW!!

This is an artificially created problem as the world moves back to isolationism. Sure there was a shortage due to Covid shutdowns and the increased use of semiconductors and more and more places. But the response was move to the far right, punish everyone through tariffs and become increasingly nationalistic.

Also the world already has a lot of fabs outside of Taiwan. It’s just that they were all owned by a single company that only made their own chips. These chips were in such low demand (only useful in desktops and laptops) that fab capacity was wasted and the company couldn’t advance their nodes due to lower and lower revenues.

End all tariffs, tell China to grow up and force Intel to become a fab-for-hire only company. Problem solved. Lol!

We can't even get people to eat healthy and exercise... I doubt our various groups will ever choose to stop trying to be the dominant variety of hairless water apes, despite the obvious upsides.

Increased competition in the semiconductor space is a good thing, however -- perhaps with AI and increased automation the labor cost can be counteracted via technology - Taiwan is a early mover in that sense, so they have a fat capital stack that's invested in older automation platforms. Kind of what happened to Intel when they dominated DUV.

 

[TheinsanegamerN]

This is an artificially created problem as the world moves back to isolationism. Sure there was a shortage due to Covid shutdowns and the increased use of semiconductors and more and more places. But the response was move to the far right, punish everyone through tariffs and become increasingly nationalistic.

The move rightward has been a response to the failures of left wing globalist policy. Coronavirus showed how weak that system was, re-embracing that after a systemic failure would be really stupid.

Which some of us have been calling out for a long time, but "ThAt WiLl NeVeR hApPeN" and pinching pennies won out, with disastrous consequences.

Also the world already has a lot of fabs outside of Taiwan. It’s just that they were all owned by a single company that only made their own chips. These chips were in such low demand (only useful in desktops and laptops) that fab capacity was wasted and the company couldn’t advance their nodes due to lower and lower revenues.

This is also false. Both Samsung and Intel have processor fabs outside Taiwan. Japanese Advanced Semiconductor Manufacturing started operation last year. There's also Global Foundries. And if you dont need cutting edge CPUs, there's a TON of other fabs out there.

List of semiconductor fabrication plants - Wikipedia

en.wikipedia.org

The fab capacity also wasn't "wasted". I have NO idea where you pulled that "fact" from. Remember intel's processor shortages in the mid 2010s? Those fabs were running at capacity. Intel's fab failures are directly tied to their corporate culture rewarding those who fell in line and punishing anyone who wanted to try new things. As a result, their talented engineers left for greener pastures, and after over a decade of that it finally bit them. Trying to avoid relying on ASML also hurt them pretty badly.

End all tariffs, tell China to grow up and force Intel to become a fab-for-hire only company. Problem solved. Lol!

Are you familiar with how the Lowest Common Denominator works? Without tariffs, all your labor ends up outsourced to whomever is cheapest, and that hasnt been working, hence why so many countries have tariffs against the US. Simply building everything in taiwan and hoping nothing happens isnt a winning strategy.

Chipmaking, at least on a TSMC level, is simply not gonna happen in the EU unless they subsidise the f**k out of it, because labour cost is just too high compared to the Far East. The EU needs to stop pussyfooting around this and just put up the damn money.

Dont forget Energy costs. EU energy is REALLY pricy compared to the US. And also all the bureaucratic nightmares.

 

[_JP_]

Chipmaking, at least on a TSMC level, is simply not gonna happen in the EU unless they subsidise the f**k out of it, because labour cost is just too high compared to the Far East. The EU needs to stop pussyfooting around this and just put up the damn money.

No need to subsidize, in a way, since Bosch/Siemens/Infenion/STMicro/ONSemi/NXP/et. al. need orders and demand from the market in a way that it makes commercial sense. The means for it to happen already exist for those companies, so all they have to do is scale up.

 

[TheinsanegamerN]

No need to subsidize, in a way, since Bosch/Siemens/Infenion/STMicro/ONSemi/NXP/et. al. need orders and demand from the market in a way that it makes commercial sense. The means for it to happen already exist for those companies, so all they have to do is scale up.

If it made commercial sense they would have built fabs there already. None of those companies are new, so if it makes commercial sense....wheres the fabs?

Reality is, if they want the fabs in the EU, they need to subsidize. Why would you build a fab in the EU when you can build one in the US for a fraction the price, both to build and operate, and where the business regulations are the size of an encyclopedia set instead of being big enough to fill a library? Even nasty tariffs dont change that equation.

 

[hsew]

European Regulations are the death knoll of most European Ventures.

Maybe they will after seeing the Orange one across the Atlantic basically redrawing the entire Globe with his sharpie, or autopen

Europe is realizing it now. If they tariff the US, the US can just cut microprocessors to Europe in retaliation or place a huge outgoing tariff on said microprocessors. Being a socialist paradise where everybody gets "free" healthcare, education, and 13 months of paid maternity leave has turned an already weak Europe into everybody's b****

 

[phanbuey]

European Regulations are the death knoll of most European Ventures.

100% - those are some legendary red tape mazes. Germany paying the price of that right now.

 

[Asni]

EU in funding the new industrial pole in Dresden (TSMC+Infineon+Bosch) where the taiwanese company is going to manufacture 28nm to 12nm wafers.
I find pretty ironic that EU is supporting a project that aims to produce obsolete nodes that are becoming irrilevant volume wise.

Spoiler

I also want to point out that Germany is living a devastating energy crysis. Energy cost is way higher than most first world countries due to the penetration of RES into their energy mix which leads to huge energy price oscillations and an abuse of lignite to compensate them (solar and wind represent everything you DON'T want to power energy intensive tasks). They went from 165 to 0Twh/year of nuclear energy and these are the consequences.

Spoiler

EU is both implementing anti-pollution measures and funding lignite powered energy intensive industries. The old continent, my continent, is dead.

 

[halcyon]

EU is both implementing anti-pollution measures and funding lignite powered energy intensive industries. The old continent, my continent, is dead.

Yes, and brain dead. Living here is like living in an old, quaint and a bit run down outside museum, which has lost its grandeur. It has it's perks, but high technology and innovation are not part of them.

I would perhaps understand it as a economic-technological specialization strategy in a fully globalized free-market world with no tariffs or cold war 2.0, IFF EU was strong in other exports, had a big slice of the world reserve currency pie and a strong financial system. But none of those factors are in place, hence brain death.

 

[Assimilator]

The move rightward has been a response to the failures of left wing globalist policy. Coronavirus showed how weak that system was, re-embracing that after a systemic failure would be really stupid.

COVID was a once-in-a-century disruption, there is no economic system that would've been able to survive such a disruption unscathed. Trying to blame it on "left" or "right" is incredibly ignorant.

EU in funding the new industrial pole in Dresden (TSMC+Infineon+Bosch) where the taiwanese company is going to manufacture 28nm to 12nm wafers.
I find pretty ironic that EU is supporting a project that aims to produce obsolete nodes that are becoming irrilevant volume wise.

Irrelevant? Older nodes are where the majority of the manufacturing of components that go into everyday appliances, and military weapons, happens. This is why GlobalFoundries has done so well for itself after dropping out of the race to chase bleeding-edge nodes: volume trumps cutting-edge.

They went from 165 to 0Twh/year of nuclear energy and these are the consequences.

Germany has screwed the energy pooch in so many ways it's not even funny. The decision to shut down their reactors was bizarre, the refusal to start them back up when Russia gas was cut off equally so, and the continuing refusal to even consider nuclear is just... I don't even know. Their latest brainfart is to throw money at so-called green hydrogen which is... ugh.

The old continent, my continent, is dead.

The Nordic countries are doing quite well for themselves, but that's mostly because they've been run by leftist governments that invest in their population's future, rather than center-right parties that are just proxies for investment banks.

 

[Daven]

The move rightward has been a response to the failures of left wing globalist policy. Coronavirus showed how weak that system was, re-embracing that after a systemic failure would be really stupid.

Which some of us have been calling out for a long time, but "ThAt WiLl NeVeR hApPeN" and pinching pennies won out, with disastrous consequences.

This is also false. Both Samsung and Intel have processor fabs outside Taiwan. Japanese Advanced Semiconductor Manufacturing started operation last year. There's also Global Foundries. And if you dont need cutting edge CPUs, there's a TON of other fabs out there.

List of semiconductor fabrication plants - Wikipedia

en.wikipedia.org

The fab capacity also wasn't "wasted". I have NO idea where you pulled that "fact" from. Remember intel's processor shortages in the mid 2010s? Those fabs were running at capacity. Intel's fab failures are directly tied to their corporate culture rewarding those who fell in line and punishing anyone who wanted to try new things. As a result, their talented engineers left for greener pastures, and after over a decade of that it finally bit them. Trying to avoid relying on ASML also hurt them pretty badly.

Are you familiar with how the Lowest Common Denominator works? Without tariffs, all your labor ends up outsourced to whomever is cheapest, and that hasnt been working, hence why so many countries have tariffs against the US. Simply building everything in taiwan and hoping nothing happens isnt a winning strategy.


Dont forget Energy costs. EU energy is REALLY pricy compared to the US. And also all the bureaucratic nightmares.

I'm sure one of us keyboard warriors will come up with the solution and post it to the TPU forums. /sarcasm Lol!

 

[phanbuey]

Ah... I'm old. lol

 

[hsew]

COVID was a once-in-a-century disruption, there is no economic system that would've been able to survive such a disruption unscathed. Trying to blame it on "left" or "right" is incredibly ignorant.

I remember a ton of push from the Left for mandating lockdowns. And examples of countries which did just fine despite resisting the lockdown agenda:

Sweden: advocated for a voluntary lockdown and social distancing, wound up with a lower mortality rate than the UK as well as less economic damage.
Iceland: no mandatory lockdown, just a ban on large gatherings and aggressive testing/contact tracing. Very low mortality rate.
Taiwan: closed borders early, but no lockdown, just a strict quarantine for arrivals and aggressive testing/contact tracing. Extremely low mortality rate.
Japan: no mandatory lockdown, Very low mortality rate. But it's Japan, so that's kind of cheating.
South Korea: a mix of Taiwan's and Japan's approach and excellent results, still no lockdown.
Finland: Same as South Korea
Norway tried lockdowns at first but pivoted away from them very quickly. Another example of low mortality and low economic impact.

You might think these countries have "leftist governments", but my next point will distinguish the percieved left agenda and clear up this misunderstanding.

The Nordic countries are doing quite well for themselves, but that's mostly because they've been run by leftist governments that invest in their population's future, rather than center-right parties that are just proxies for investment banks.

A country having the agenda of "investing in their population's future" actually indicates a very Populist agenda, unlike today's Leftist agenda which appears to be "investing in the future of non-citizens" (in that relevant dichotomy). You can see this in countries such as France, UK, Germany, and, until recently, certain Cities and States in the US which allowed tons of unchecked migration and granted to those non-citizens tons of public welfare and entitlements upon arrival... at taxpayer's expense. USAID is another example of this left-leaning mentality and how catering to that ideological facet by sending billion$ of US taxpayer dollars overseas for the welfare and betterment of other peoples is diametrically opposed to the populist approach of... well... not. Of instead, "investing in a country's own population's future". That's Populism.

 

[phanbuey]

Nordic countries are just built different. Always have been.

 

[Assimilator]

Sweden: advocated for a voluntary lockdown and social distancing, wound up with a lower mortality rate than the UK as well as less economic damage.
Iceland: no mandatory lockdown, just a ban on large gatherings and aggressive testing/contact tracing. Very low mortality rate.
Taiwan: closed borders early, but no lockdown, just a strict quarantine for arrivals and aggressive testing/contact tracing. Extremely low mortality rate.
Japan: no mandatory lockdown, Very low mortality rate. But it's Japan, so that's kind of cheating.
South Korea: a mix of Taiwan's and Japan's approach and excellent results, still no lockdown.
Finland: Same as South Korea
Norway tried lockdowns at first but pivoted away from them very quickly. Another example of low mortality and low economic impact.

And yet you managed to miss the most important thing that all those societies have in common: high soceital compliance. Meaning everybody wore a mask, everybody avoided attending events, and everybody got vaccinated. No mandates were necessary because those populations behaved like adults with empathy and concern for each other, not children spreading disease and refusing to get vaccinated against it because "MUH FREEDOMS".

Of instead, "investing in a country's own population's future". That's Populism.

No it's not. Go and pick up a dictionary for once instead of inventing new meanings for words that have established ones. And especially do not insult my intelligence by attempting to justify anti-migrant bigotry, when it's the migrants that prop up economies by being the only ones willing to do the jobs that the "honest hardworking" natives of those nations refuse to.

 

[Random_User]

A bit to late, honestly. The EU was scratching their fat old bums for too long. As soon, as the PRC will get their first decent, competitive in-house chips, they will gobble all possible refined silicon stock. Who the EU will buy it then from?

Spoiler: P.S.:

Some speculations hete:
The fabs and the EUV and other equipment, and assets, are just one part of the problem. The more important and clitical one, is to get the staff, personel, qualified and trained for such tasks.
But also due to EU labour standards, which might prevent them from rivaling the global semiconductor leaders, which have much stricter conditions, much speeded-up production pace.

Chipmaking, at least on a TSMC level, is simply not gonna happen in the EU unless they subsidise the f**k out of it, because labour cost is just too high compared to the Far East. The EU needs to stop pussyfooting around this and just put up the damn money.

Moreover, even at least at Samsung level, it's pretty much impossible. They used to sit on piles of money, got from taxing and fining different multi-billion$ corporations, and waiting, until one of them would suggest to build a fab or two, and later to "divide" the budged/kickbacks.
To get this level of foudry engineering, the EU should have had started, like back in 2006-2007. Or if to be completely honest, they could have buy out the AMD's Dresden fab, and year by year, smoothly advancing/enhancing it. So it would end up cheaper, and they could have a stable income frome the constant chip manufacturing.
At the very least, they could get the special agreement fith GloFo, for cheaper prices, in return for the EU government funding and allocation.

Just some random thought.

 

[rusty caterpillar]

This is an artificially created problem as the world moves back to isolationism. Sure there was a shortage due to Covid shutdowns and the increased use of semiconductors and more and more places. But the response was move to the far right, punish everyone through tariffs and become increasingly nationalistic.

Also the world already has a lot of fabs outside of Taiwan. It’s just that they were all owned by a single company that only made their own chips. These chips were in such low demand (only useful in desktops and laptops) that fab capacity was wasted and the company couldn’t advance their nodes due to lower and lower revenues.

End all tariffs, tell China to grow up and force Intel to become a fab-for-hire only company. Problem solved. Lol!

It is some artificial driven prices but, is not the entire cause IMO.
Intel foundries in US , I believe 6 of the foundries, TSMC will build some to in US, but for Intel they need maybe a decade or maybe less to get the skillful workforce to put those foundries at least 60% capacity. Intel liquidity is very low. Those in Vietnam not sure how long they will go for and what tier will be.
India going slow atm.
TSMC is only 50% of world semiconductors but, they are overwhelmed and is the best quality. TSMC remain the major producer and high quality for the next decade or so.
While in EU is a very shallow probability something will spruce.
With the current global demands. China will remain the main producer for lower tiers and TSMC for higher tiers for some years to come. Maybe 5 maybe 10 years.

 

[TheinsanegamerN]

COVID was a once-in-a-century disruption, there is no economic system that would've been able to survive such a disruption unscathed.

I disagree. Yes COVID was a major disruption, however a local production is able to respond far faster then a global one. Toilet paper is a fantastic example, it is made mostly locally, and the shortage was almost entirely artificial, driven by people buying way too much of it at once. These factories were able to respond to higher demand within days.

Meanwhile, electronics from overseas took over a year for stock to "normalize" and 2 years for the price to come down. The more moving pieces you have, and the greater the distance, the harder these chains are to maintain.

Trying to blame it on "left" or "right" is incredibly ignorant.

And yet, this didn't give you pause:

The Nordic countries are doing quite well for themselves, but that's mostly because they've been run by leftist governments that invest in their population's future, rather than center-right parties that are just proxies for investment banks.

And yet you managed to miss the most important thing that all those societies have in common: high soceital compliance. Meaning everybody wore a mask, everybody avoided attending events, and everybody got vaccinated. No mandates were necessary because those populations behaved like adults with empathy and concern for each other, not children spreading disease and refusing to get vaccinated against it because "MUH FREEDOMS".


No it's not. Go and pick up a dictionary for once instead of inventing new meanings for words that have established ones.

And especially do not insult my intelligence by attempting to justify anti-migrant bigotry, when it's the migrants that prop up economies by being the only ones willing to do the jobs that the "honest hardworking" natives of those nations refuse to.

You really shouldn't go around accusing others of "bigotry" because you disagree with them, or call them "leftist" because you like them. It just makes you look rather silly. IIRC, the last time Bernie Sanders tried to imply that Nordic countries were Leftist, they publicly told him off for being so ignorant.

EU in funding the new industrial pole in Dresden (TSMC+Infineon+Bosch) where the taiwanese company is going to manufacture 28nm to 12nm wafers.
I find pretty ironic that EU is supporting a project that aims to produce obsolete nodes that are becoming irrilevant volume wise.

Spoiler

View attachment 390708

I disagree. you dont need to be using 5/4/3nm for things like window controllers, industrial microprocessors, or the chips used in things like sensors. And if you're going to build up a fab industry, you dont start with the single most complicated ones out there.

The whole shortage of chips for cars and appliances wasnt due to TSMC 7nm, it was due to a lack of 28nm dies. Many car processors at the time were still 45nm.

I also want to point out that Germany is living a devastating energy crysis. Energy cost is way higher than most first world countries due to the penetration of RES into their energy mix which leads to huge energy price oscillations and an abuse of lignite to compensate them (solar and wind represent everything you DON'T want to power energy intensive tasks). They went from 165 to 0Twh/year of nuclear energy and these are the consequences.

Spoiler

EU is both implementing anti-pollution measures and funding lignite powered energy intensive industries. The old continent, my continent, is dead.

Germany, and toa great extent the EU, royally screwed the pooch on "green" energy. France, with an entirely nuclear grid and no major disasters for over half a century, is the model we should be copying.

 

[Bomby569]

Chipmaking, at least on a TSMC level, is simply not gonna happen in the EU unless they subsidise the f**k out of it, because labour cost is just too high compared to the Far East. The EU needs to stop pussyfooting around this and just put up the damn money.

The US has fabs, Europe has fabs (just not of the high tier nodes), SK has fabs. Not all European countries have the same labour costs, in some it's even cheaper than in SK for example.
A bunch of bad arguments being made.
The subsidies thing is true, but not because of labour, that's straight up not true.

 

[hurakura]

European Regulations are the death knoll of most European Ventures.


Europe is realizing it now. If they tariff the US, the US can just cut microprocessors to Europe in retaliation or place a huge outgoing tariff on said microprocessors. Being a socialist paradise where everybody gets "free" healthcare, education, and 13 months of paid maternity leave has turned an already weak Europe into everybody's b****

USA should definitely do this right now. USA doesn't need that filthy socialist European money. No more processors for EU, throw them back to medieval times, use pen and paper instead of computers.
Go USA.

 

[Bomby569]

Americans aren't the smartest bunch, no wonder trump is the king there, let's see how the Taiwanese make microprocessor for you without asml or zeiss.

 

[Asni]

Irrelevant? Older nodes are where the majority of the manufacturing of components that go into everyday appliances, and military weapons, happens. This is why GlobalFoundries has done so well for itself after dropping out of the race to chase bleeding-edge nodes: volume trumps cutting-edge.

I disagree. you dont need to be using 5/4/3nm for things like window controllers, industrial microprocessors, or the chips used in things like sensors. And if you're going to build up a fab industry, you dont start with the single most complicated ones out there.
The whole shortage of chips for cars and appliances wasnt due to TSMC 7nm, it was due to a lack of 28nm dies. Many car processors at the time were still 45nm.

That's not what i really meant. I know that older nodes are still useful, everything needs a decent processor nowadays, but that's not the type of modernization Draghi was talking about. That's just producing 10-20years old tech with no additional R&D, that's exactly what prevented Europe from achievement the same development as USA or China. Highly qualified engineers are not going to Dresden, let's be honest.

When i talk about "irrelevancy", i'm referring to TMSC economics: older nodes production is shrinking (look at the graph) because TMSC doesn't rely on older techs (GloFo may have different plans).