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The European Commission is preparing an EU chip alliance that will focus on the design and production of 20-10nm chips. One of the three European semiconductor companies has already bowed out.
CEO Jean-Marc Chery of STMicroelectronics said his company won’t be joining the semiconductor alliance that’s being prepared by the European Commission. Talking to French news channel BFM Business, Chery called the initiative a positive development but stated that it bears no relevance for his company. “If it’s about advanced technologies, we don’t have any reason to participate. That’s marginal to our activities,” said Chery.
The European Commission announced the alliance on processors and semiconductor technologies on Wednesday, along with one centered on industrial data, edge and cloud computing. Previously, the EC already put in place European partnerships on batteries, raw materials and hydrogen.
The materials provided about the semiconductor alliance don’t reveal what its goals are or who will participate. However, European Commissioner Thierry Breton told Bloomberg that he wants governments, companies and research institutes to join hands and focus on the design and production of 20-10nm chips. In parallel, the Commission is working on plans to get Europe back into leading-edge semiconductor manufacturing. Breton acknowledged that for realizing the latter ambition, working with partners companies would be best.
Infineon seems to take a more positive stance towards Breton’s alliance than ST. “Infineon welcomes EU Commissioner Breton taking initiative to strengthen the chip industry in Europe,” the German chipmaker emailed to Bits&Chips. “We, like other European players, are in discussions with Commissioner Breton. In our view, it will be important to expand the coalition between EC and member states and to include all relevant stakeholders like industry and research organization to finally create a successful European alliance for microelectronics.”
An NXP spokesperson confirmed that it, too, is currently in discussions with the European Commission, but declined to divulge any details as to the company’s position on participating in the alliance.
The European Commission wants Europe to become less dependent on others when it comes to strategic technologies. The overarching goal in semiconductors, outlined in the Digital Compass presented in March, is to double Europe’s semiconductor manufacturing to 20 percent of worldwide output. “We want to come back to our former market share of production for the needs of our industry,” Breton said to Bloomberg. Europe’s share of semiconductor manufacturing has dropped over the years because the region has been “too naive, too open,” he said.
According to Breton, by now at least 22 member states have signed a joint declaration that calls for “strengthening Europe’s capacity to develop the next generation of processors and semiconductors. This includes chips and embedded systems that offer the best performance for specific applications across a wide range of sectors as well as leading-edge manufacturing progressively advancing towards 2nm nodes for processor technology.”
A lot of the funding for the EU’s semiconductor ambitions will have to come from member states. However, 20 percent of the EU’s Recovery and Resilience Facility (RRF, colloquially known as the corona recovery fund) has been earmarked for the digital transition, which includes advancements in semiconductor technology. That amounts to 145 billions euros, spread out over member states. The EC has to approve the investments proposed by member states. A first tranche of proposals has been submitted last week, though not all governments (including the Netherlands) participated in this round.
Additionally, the EU offers the so-called Important Project of Common European Interest (IPCEI) instrument, which allows member states to address market failures by pooling resources under relaxed state-aid rules, along with possible support from Brussels. France, Germany and Italy set up an IPCEI covering microelectronics in 2018, recently joined by Austria. Companies, national governments and the European Commission have been working on a second IPCEI for some time now. The German RRF proposal is reported to include three IPCEIs, for hydrogen, cloud infrastructure and services, and microelectronics.