Think tank: rejuvenate European IC design before building a fab

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Europe first needs to address the lack of fabless chip design companies before even considering building a cutting-edge semiconductor fab, German think tank Stiftung Neue Verantwortung (SNV) concludes. Otherwise, “chasing the 2nm fab is a futile endeavor with a very real risk of wasting billions of euros in public and private money.”

Credit: TSMC

SNV argues that a European foundry would have a hard time filling up with very little demand for leading-edge chips coming from European companies. To hope for orders from US fabless companies would be “at best overly optimistic and at worst naive” since these will be able to have their ICs manufactured at Samsung and TSMC, both of which have committed to building fabs in the US. Finally, SNV points out that building a European fab runs contrary to the consolidation that has taken place in advanced semiconductor manufacturing, resulting in less than a handful of companies operating advanced fabs.

“Money and resources would be better spent in other areas where Europe is even more dependent on foreign technology providers: designing cutting-edge logic chips (such as processors for data centers, high-performance computing, artificial intelligence and mobile applications). Europe’s Achilles heel is the lack of fabless companies that design chips. Once Europe’s chip design prowess is rejuvenated, the region will be in a much stronger position to think about how best to invest in its manufacturing capabilities,” SNV writes.