Europe's Semiconductor Relief Fund

European Commissioner for Internal Market Thierry Breton announced a joint declaration from 17 EU members on "A European Initiative on Processors and semiconductor technologies 'to strengthen Europe’s capabilities to design and eventually fabricate the next generation of trusted, low-power processors'. 

Why now? 

In spite of the pandemic, the global market is expected to grow by 5.1% in 2020 (+8.4% next year*), but thanks to Asia Pacific and the Americas, who are clearly driving it. NXP (Netherlands-USA) and Infineon (Germany) are no match for the big guns from the States or South Korea, and Europe's biggest player, STMicroelectronics, doesn't even belong to the EU (Switzerland). 6G looms on the horizon, and China is all the more ambitious that solutions are urgently needed for Huawei and ZTE, even after Trump leaves the White House. 

Semiconductor supply is critical for global competitivity, and the joint declaration stresses some of its strengths and weaknesses:

"Today Europe has notable strengths in specific areas of the semiconductor industry, such as power electronics, RF technologies, smart sensors for embedded AI, microcontrollers, low-power technologies, secure components and semiconductor manufacturing equipment. European chipmakers enjoy a strong global presence in vertical markets such as embedded systems for automotive and industrial manufacturing. Europe also has a strong technological position in mobile networks including current 5G and emerging 6G technologies. However, Europe’s share of the 440 B€ global semiconductor market is around 10%, well below its economic standing. Europe is increasingly dependent on chips produced in other regions of the world - notably those used for electronic communications, data-processing and compute tasks, including processors."

So it looks more than a defensive move than clear and immediate danger for Samsung and Co. The memo clearly identifies an opportunity: 'some of the $145bn 20% of the European Recovery and Resilience plans should go to digital transition; this is up to 145B€ over the next 2 to 3 years.'

The local ecosystem obviously lobbied efficiently to get 17 members on board at a significant moment. And they found a powerful voice in Thierry Breton, a former Mr Turnaround for Bull, France Telecom, Thomson, and Atos,

Will it be enough? It certainly won't hurt.

mot-bile 2020

* $ 433 bn in total for 2020 ('WSTS Semiconductor Market Forecast Autumn 2020', a recent report by World Semiconductor Trade Statistics)