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EU wants to involve TSMC and Samsung in the creation of advanced chip production in Europe
eleven.02.2021 [22:37],
Konstantin Khodakovsky

The European Union is considering building a cutting-edge semiconductor plant in Europe to avoid relying on the United States and Asia for technology underpinning some key industries.

Krisztian Bocsi / Bloomberg

According to Bloomberg informants, the EU is going to produce chips at rates thinner than 10 nanometers up to 2 nm. The goal is to reduce reliance on countries like Taiwan for chips for 5G wireless systems, connected cars, high performance computing, and more. d.

Taiwan’s TSMC and Korea’s Samsung Electronics – two leaders in semiconductor manufacturing – may be involved in EU project. However, so far nothing has been decided – this was announced at a meeting with the press by a representative of the French Ministry of Finance after the publication of information about the project in Bloomberg.

These plans did not arise from scratch. For example, automakers are now experiencing an acute shortage of chips. The largest car manufacturer in Europe, Volkswagen AG, was unable to produce tens of thousands of planned vehicles, and Daimler AG said it was doing everything possible to minimize the impact of supply shortages on its operations. Although the problem may be short-lived, it once again highlighted the problem of importing key technologies into the EU from abroad.

EU efforts to boost chip production led by European Commissioner for Industry Thierry Breton. We can talk about both the reconstruction of existing lithographic enterprises, and the construction of a completely new plant. However, the final decision has not yet been made and even the approximate framework for the implementation of the project is unknown.

Representatives of the European Commission and Samsung did not comment. And TSMC spokeswoman Nina Kao commented on the possibility of cooperation with the EU: “When it comes to choosing a site for the construction of a production plant, we need to take into account many factors, including the needs of customers. TSMC does not rule out any possibilities, but at the moment there are no specific plans. “.

Once a hub for cutting-edge semiconductor factories, Europe has plummeted over the past 20 years. And automotive chip makers including NXP Semiconductors NV and Infineon Technologies AG prefer to outsource most of their manufacturing orders to giants like TSMC or Samsung. When automakers wanted to increase the number of orders at the end of 2021, they faced a problem: production capacity had already been distributed for a long time in advance among participants in other industries such as mobile electronics.

EU Chief Digital Officer Thierry Breton (Stephanie Lecocq / Pool / Reuters)

Last year, the EU set a goal to produce at least one fifth of the world’s chips by value, without giving much details on how it is going to achieve that. “Without our own European capacities in the field of microelectronics, there will be no European digital sovereignty,” said Mr. Breton in his speech, adding that the EU currently accounts for less than 10% of the world production of processors and other microelectronics. The European Commission is about to create an alliance for microelectronics, which is likely to include the main European chip makers, as well as possibly automakers and telecommunications companies. Technical work on the alliance’s plans continues, but initial discussions have already passed, according to informants. The alliance will allegedly be officially presented at the end of the first quarter of the year.

EU plans to revive its semiconductor industry may be too late as China, Japan and the US have been trying to strengthen their positions in their own chip printing for years. But all these countries are increasingly lagging behind the industry leaders in the face of Samsung and, especially, TSMC.

Liesa Johannssen-Koppitz / Bloomberg

The industry has also spent decades building a well-functioning global supply chain that would be difficult to change overnight. This is the opinion of Peter Wennink, the executive director of the Dutch ASML Holding NV, which, in fact, acts as a monopoly in the market for advanced lithographic equipment. “If someone believes that they can really achieve their goal in a short time, then this is simply impossible,” he said at the ASML press conference. “If governments are determined to do this, it will take years, not months.”.

Automakers traditionally use relatively simple chips, but as Tesla and VW cars require more sophisticated software, the demand for advanced chips is growing. GlobalFoundries, owner of the largest semiconductor plant in Europe, is capable of producing only 28nm processors at its Dresden facility.

europeanwesternbalkans.com

Turning the tide will, of course, require huge investments. Breton said last year that the new alliance will receive an initial combined public and private investment of € 30 billion, just slightly higher than TSMC’s annual capital expenditure this year. About 19 EU member states have already supported the plans of the European Commission and agreed to create an investment vehicle co-financed by countries and participating companies.

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