As part of a wide-ranging set of proposals aimed at upping Europe's digital game and moving towards "digital sovereignty" by 2030, which was packaged together as a "digital compass," the European Commission (EC) laid out once more its ambitious plan to ramp up production of the latest chips.
The EC opined that the production of "cutting-edge and sustainable semiconductors" in Europe, which include processors, should represent at least 20% of world production in value by the end of the decade. That doubles the 10% share the region claimed in 2020.
What the commission means by "cutting edge" is manufacturing capacities below 5nm nodes, aiming at 2nm, and which are ten times more energy efficient than today.
Don't panic, there's funding available (but not sure how much)
The EC gave some inkling as to how it intends to meet the 20% chip production target. First off, it has backed a proposal to launch a joint undertaking on "key digital technologies [KDT]." The aim here is to coordinate research and innovation activities across Europe on semiconductor and processor technologies.
The KDT initiative comes under the auspices of Horizon Europe, a European Union funding programme for research and innovation. Running from 2021 to 2027, Horizon Europe has a proposed budget of €100 billion ($119 million).
How much the KDT joint undertaking will see of that is not clear. The EC nonetheless claimed the new program was expected to "significantly increase investments" when compared with ECSEL, KDT's predecessor. ECSEL bagged €4.9 billion ($5.8 billion) in funding between 2014 and 2020.
The EC also highlighted a "joint declaration" of 20 EU member states, unveiled last December, to develop processors and semiconductor technologies. Thierry Breton, the EU's internal market commissioner, talked earnestly at the time about "Europe's industrial strategy and digital sovereignty."
In a speech last summer, Breton said he was also keen on launching a European alliance on microelectronics "with an initial combined public and private investment of €20 billion [$23.8 billion] to €30 billion [$35.8 billion]."
Sounds fab, but…
Pumping up fab capacity in Europe – and stealing market share from South Korea's Samsung and Taiwan's TSMC, the world's leading manufacturers of high-end chips – is a big ask.
Moreover, Intel, under new CEO Pat Gelsinger, seems determined to make up lost manufacturing ground on its Asian rivals when it comes to the cutting-edge stuff. As for China it wants to build up digital sovereignty of its own, loosening dependence on component supply chains vulnerable to US-led sanctions.
There's lots of catching up for Europe to do, then, made doubly hard by a keen desire in the US and Asia to meet ballooning demand for chips. Skeptics of the EC's "digital compass" might also point out that Europe's NXP Semiconductor and Infineon Technologies now outsource much of their chip production.
Yet the Netherlands is home to ASML, which is the sole manufacturer of advanced equipment needed to make the latest chips. EC executive vice-president Margrethe Vestager, as reported by the BBC, indicated this might be one way to attract more Europe-based manufacturing facilities, although it wasn't entirely clear the plan she had in mind.
"We are in a sort of paradoxical situation where Europe is using a lot of these different types of technology, but we're producing little," she said. "Yet [chip] production is reliant on machinery produced in Europe. So, there's an interdependency here."
According to figures cited by the EC, worldwide sales of semiconductors were $113.6 billion during the third quarter of 2020. Globally, the market for electronic components – again, according to numbers wheeled out by the commission – is expected to top $1 trillion by 2030.
TSMC, Samsung on European soil?
According to a recent report by Bloomberg, the EU is already mulling the possibility of building an advanced semiconductor factory in Europe. One mooted possibility, but not confirmed, was that TSMC and Samsung might somehow be involved in the project.
"When it comes to fab location selection, we need to consider many factors including customers' needs," said a TSMC spokesperson. "TSMC does not rule out any possibility, but there is no concrete plan at this time."
— Ken Wieland, contributing editor, special to Light Reading