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EU semiconductor investment not nearly enough, warns chip boss
We won't get there by simply funding Intel and TSMC into building fabs here, says NXP CEO
Mon 3 Oct 2022 // 13:30 UTC
EU funding to boost the region's semiconductor industry under the European Chips Act is nowhere near enough investment to meet the targets set for 2030, according to the head of one of its largest chip companies.
A bright spot in Europe's chip ambitions: ASML, the world's largest supplier of lithography systems for chip manufacturers, is still growing
The warning comes from Kurt Sievers, chief executive officer of Netherlands-based chipmaker NXP Semiconductors, who said the amount of funding the EU wants to invest into the semiconductor industry simply won't enable it reach the self-declared target of claiming a 20 percent share of the global semiconductor market by 2030.
Speaking at the Global Foundries Technical Summit in Dresden, Germany, Sievers said it would require hundreds of billions of euros to be able to make this target, according to
, much more than the €43 billion (c $42 billion) that was put forward when the European Chips Act was
in February.
"We have calculated that we would need €500 billion investment in Europe to reach the 20 percent market share goal formulated in the EU Chips Act," the boss of NXP, which makes
for many of the contactless transport cards in Europe, is quoted as saying.
Reaching 20 percent of the global semiconductor market from today's estimated 10 percent would require a tripling or quadrupling of the chip manufacturing capacity represented among EU countries, a daunting task, especially given the ambitious expansion plans of chipmakers such as TSMC elsewhere in the world.
Andrew Buss, research director for European Enterprise Infrastructure at IDC, said he agreed the current level of funding on offer seemed a little on the low side, but that in an undertaking of this sort it was important to start somewhere.
"Once it does start, you soon see things start to happen," he said, mentioning the American government's
, which has already proved successful in starting the ball rolling on an ambitious program to overhaul its own semiconductor industry.
However, building up a credible world-class semiconductor industry requires more than just pouring money into the sector, he adds, calling for careful planning to deliver the skills needed to design advanced semiconductors as well as develop Europe's own manufacturing processes instead of relying on companies like Intel and TSMC to build chip fabrication plants here, as is happening with
in Germany.
"Reaching 20 percent of the global semiconductor market would be a challenge no matter how much money you throw at it," Buss said.
However, Europe does have one advantage in its favor, and that is the presence in the region of ASML, a key supplier of vital equipment required for semiconductor manufacturing, Buss added.
The amount of investment being made available by governments to boost chip manufacturing has been questioned before, with Gartner VP for Semiconductors & Electronics Richard Gordon
that even the US CHIPS Act investment is likely to be inadequate.
"$52 billion is a drop in the bucket compared with what the semiconductor companies like Samsung and Intel are themselves planning to invest over the next decade. It's hundreds of billions. I don't think people realize how much investment chip fabrication requires," he said. ®
