Europe has strategic assets in the semiconductor value chain, but revitalizing the manufacturing economy, fostering and protecting innovation, and bridging the talent shortage are essential factors for sustainable European technology sovereignty.

In the 1990s, Europe experienced a surge in new fab installations. The flow then reversed, and the continent has fallen far behind in semiconductor manufacturing capacity over the past two decades.

According to consulting firm Kearney, Europe’s share in global chip manufacturing has dropped from 25% in 2000 to 8% today. An even more drastic decline has occurred in advanced semiconductor technology, with Europe’s market share falling from 19% in 2000 to zero today.

Europe’s dependence on Asian semiconductors has become too pervasive and has had a ripple effect on the broader automotive and consumer electronics sectors. In response, the European Union has set a strategic ambition to more than double its share of semiconductor manufacturing in 2030.

Laith Altimime, president of SEMI Europe, is a prominent presence in that effort. Altimime has a constant pulse on the semiconductor industry. He leads SEMI’s activities in Europe, the Middle East, and Africa and oversees standard-setting activities, advocacy, community development, exhibitions, and programs. He provides support and services to SEMI members with supply chain interests in Europe.

In a Q&A with EE Times Europe, Altimime discussed Europe’s vision and missions to strengthen semiconductor manufacturing operations and improve the resilience of supply chains.

EU’s semiconductor sovereignity

SEMI Europe recently outlined a series of recommendations to reinforce the resilience and competitiveness of the semiconductor ecosystem in Europe. The recommendations, which call for a more transversal collaboration and open innovation within Europe, are:• Semiconductor Manufacturing: Setting a Target to Steer Europe’s Efforts• Semiconductor Research and Development: A Key Driver of Innovation and Resilience• Semiconductor Supply Chains — Global Partnerships for a Global Industry• Upskilling and reskilling as a fundament for the Industrial Alliance for Processors and Semiconductor Technologies and the Chips Act

EE Times Europe: If you were to prioritize SEMI Europe’s four recommendations, what would be the top priority?

Laith Altimime: Semiconductors must remain at the core of Europe’s industrial and technological ambitions. With the launch of the Industrial Alliance for Processors and Semiconductor Technologies and the announcement of the Chips Act, Europe has taken a pivotal step in securing supply chain resilience and the future competitiveness of the microelectronics ecosystem.

I believe all four of our recommendations go together in order to maintain Europe’s leadership and achieve the goal to produce 20% of the world’s microchips by 2030. European Commission President Ursula von der Leyen, in her address at the Davos Agenda, reaffirmed the strategic importance of our industry, saying “There’s no digital without chips,” while highlighting five key focus areas of the upcoming Act that are well-aligned with our four recommendations.

If I was to focus on one critical point, that would be the Talent Pipeline. The semiconductor industry is currently facing an unprecedented shortage of talent, not just in Europe but globally. It is critical that Europe prioritize the development of long-term pan-European skills strategies, capitalizing on expertise from skills initiatives such as the SEMI Europe–led Microelectronics Training Industry and Skills (METIS) project and the mobilization of the Pact for Skills for microelectronics. These skills projects are instrumental for achieving the goal by 2030.

EETE: SEMI suggests the development of common strategies for better securing the semiconductor supply chain, including semiconductor equipment, materials, and raw materials. What kind of strategies? Are European countries sometimes too protective of their technological advances to the point of hindering pooling?

Altimime: The automotive industry chip shortage triggered by Covid-19 has transitioned from being a seemingly minor irritation in December 2020 to a full-blown global supply chain crisis up and down the value chain, including semiconductor equipment, materials, and raw materials and components.

In our recommendations, SEMI suggests establishing mechanisms for increased awareness of supply chain bottlenecks in both the semiconductor industry and end-user sectors. By introducing means to share best practices on supply chain monitoring and bottleneck mitigation, potential disruptions and risks could be [promptly] identified and alternative means of supply secured. To remain competitive and advance our strategic position in the digital age, we also suggest that Europe must continue to invest in the microelectronics industry to advance innovations, new materials, designs, equipment, and manufacturing to maintain global leadership and further strengthen the resilience of our supply chain.

The European Commission president also highlighted this as the fourth focus area, noting: “We will improve our toolbox to anticipate and respond to shortages and crises in this sector to shore up our security of supply, so as to be better prepared.” In her closing remarks, she added: “We will promote diversification among like-minded partners, we will promote more balanced interdependencies, and we will build supply chains we can trust by avoiding single points of failure.”

EETE: Do you believe in a Europe-first spirit, in which leaders would seek to serve the interests of Europe first, before serving those of their respective countries?

Altimime: Our industry is global, and with so many opportunities and challenges ahead driven by the digital transformation, collaborations and partnerships across the global value are crucial for success to maintain Europe’s leadership in the digital age. Continued investment is needed to maintain leadership in core strengths such as R&D, equipment, automotive, and medical.

I again refer to the European Commission president’s closing remarks: “Europe will always work to keep global markets open and connected. This is in the world’s interest, and it is in our interest. But we also need to tackle the bottlenecks that slow down our growth, because this will help us become a stronger player, not just in some niche but throughout the whole value chain.”

There are great opportunities for closer partnerships, connecting the key players [and] key ecosystems, and building on the strengths of different players in the global value chain. This is an area where SEMI plays a strategic role as a global industry association with over 2,400 members.

EETE: Could the discussion with Intel CEO Pat Gelsinger about the establishment of a European megafab realistically become a pan-European discussion?

Altimime: I don’t see why not. This would be key toward Europe’s goal of achieving 20% global market share by 2030.

In his press announcement on Jan. 20, 2022, Gelsinger emphasized the impact the chip shortage has had on a wide range of industries in the past two years, hurting sales of everything from cars to mobile phones, urging Europe and U.S. to push ahead with chip-manufacturing plans. This was also communicated by SEMI Europe in a letter to Commissioner Breton, recommending that Europe and the U.S. continue to invest in the microelectronics industry to advance new materials, designs, and architectures while remaining open to all who can add value and foster innovation.

Gelsinger said he will soon announce expansion plans for Intel’s manufacturing in the U.S. and Europe. I naturally expect that the discussion around the European megafab will go beyond its current scope. [This article was developed for and originally published in EE Times Europe Magazine]

A 2-nm fab: futile or farsighted?

The European Commission presented its Digital Compass in March 2021, then launched the Industrial Alliance on Processors and Semiconductor Technologies and announced the European Chips Act shortly thereafter. The motivation behind these successive initiatives has been to put semiconductors back at the core of the European technological race and ensure Europe’s sovereignty. Because of concerns about overreliance on chip production in Asia and the risk of being caught in the crossfire of Asia-U.S. geopolitical tensions, the EC called for establishing European manufacturing capacity below the 5-nm node, aiming at 2 nm, and for Europe to account for 20% of the world’s semiconductor production by value by 2030.

Following these announcements, however, market research firm Yole Développement suggested the plans were overly ambitious. Noting that “Intel has encountered difficulties in delivering its own advanced 7-nm manufacturing process,” Yole asked, “If the U.S. computing giant can’t easily succeed at this process node, should Europe pursue an even riskier jump to 5 nm?”

EETE: Does Europe really need a US$30 billion, 5-nm or 2-nm node fab? Is the European market (i.e., automotive, IoT, AI, connectivity, industrial) mature enough for such advanced technologies?

Altimime: The chip shortage has put the spotlight on the lack of production outside of Asia, which in fact produces approximately 80% of all chips. Increasing tensions with China also have added pressure on U.S. lawmakers to restore local manufacturing. The uncertainties of these geopolitical tensions put Europe in an exciting and competitive position.

I believe the “No Digital without Chips” theme of the European Commission president is a very powerful statement of how chips will continue to play an even more strategic part in our everyday digital life.

AI will transform all markets and applications, with 75 billion connected devices by 2030, delivering a “data explosion” and a corresponding explosion of demand for semiconductors of all kinds and technology nodes. With this increased demand and the goal to achieve 20% production by 2030 in mind, as well as the intention to promote more balanced interdependencies and build supply chains we can trust, single points of failure must be avoided. It is of paramount importance to extend Europe’s manufacturing capabilities in the most advanced technology nodes and maintain Europe’s competitiveness and strategic importance in the global value chain.

EETE: If this project is confirmed, should it not be pursued with partners such as TSMC?

Altimime: With such tremendous opportunities ahead, it will be a tremendous endorsement if TSMC would also announce investments in Europe. The same argument applies for the Intel fab. This will accelerate Europe’s progress toward achieving the ambition of 20% production.

SEMI is also playing an instrumental role in enhancing collaborations between Europe and the U.S. and between Europe and Taiwan.

French presidency of the council of the European Union

France took over from Slovenia the presidency of the Council of the European Union on the first day of 2022 and will be replaced by the Czech Republic in the second half of the year. In his speech at the Élysée Palace, French President Emmanuel Macron declared, “We need to move from being a Europe of cooperation inside of our borders to a powerful Europe in the world, fully sovereign, free to make its choices, and master of its destiny.”

EETE: As president of SEMI Europe, you sent a letter to French President Macron asking him to encourage closer collaboration among member states for the benefit of the semiconductor industry. Is France’s six-month presidency an opportunity for technology and, more specifically, the European semiconductor industry? What makes you think that France has the means to act and achieve real change?

Altimime: The French government understands the importance of technology as a key enabler for Europe’s future economic growth. For example, in 2017, President Macron called upon France to “think and move like a startup.” This sent a powerful message across Europe to engage innovation and drive technological transformation. Two years later, France announced a multi-billion–euro investment to support its domestic tech industry and create 25 French “unicorns” by 2025. Besides being home to numerous semiconductor companies and R&D hubs, France also hosts the world’s largest tech incubator in Paris.

These and many other examples make me confident that the French presidency can deliver real change in the upcoming months. France’s ecosystem is a fundamental part of Europe’s microelectronics ecosystem, with a strategic hub in Grenoble with CEA-Leti as one of the world’s powerhouses in innovation; STMicroelectronics as a world-class provider of state-of-the-art solutions in areas such as smart driving, power and energy, IoT, 5G, and, of course, their automotive industry; and Schneider Electric as the leader in digital transformation of energy management and automation playing a strategic role in providing green energy management solutions.

Talent gap in microelectronics

The Covid-19 pandemic has accelerated the shift to a digital economy, and the global semiconductor market is now expected to reach US$1 trillion by 2030. At last year’s Leti Innovation Days, Ajit Manocha, president and CEO of SEMI, stressed that closing the talent gap is “extremely critical for the success and the growth of our industry.”

EETE: What actions are needed to address the talent gap in Europe?

Altimime: To address the talent gap, SEMI takes a holistic approach to nurture the workforce and reskill and upskill for career advancement, as well as developing new talent and building awareness of the microelectronics industry as a career destination at all levels — from grade school and post- secondary education to people returning to the workforce. We are fully committed to building on the momentum created with the METIS Erasmus+ collaborative project and to mobilizing our industry and education partners for a successful Pact for Skills in microelectronics launched in November 2020.

The launch is a significant step forward, with a focus on reskilling and upskilling for Europe that will help ensure the continent’s recovery from the Covid-19 pandemic and bolster its digital and green transitions.Microelectronics provides the foundation for digital infrastructure, and while the industry’s strategic importance is recognized worldwide, a future diverse talent shortage could limit the industry’s growth.

The Pact for Skills for microelectronics offers opportunities for the future and is essential for enabling sustainable growth and a more resilient European supply chain.

We will have a sharp focus on adding resiliency to the European supply chain at the SEMI Industry Strategy Symposium Europe 2022, on May 30 in Brussels. Themed “Resilient Europe: Semiconductors Enabling a Sustainable Digital Life,” the event will examine economic, technology, market, business, and geopolitical developments and trends influencing the global electronics manufacturing industry, along with their implications for strategic business decisions.

---

This article was published in the March Edition of EE Times Europe Magazine as part of a section on the microelectronics ecosystem in Europe.

Sign up for our weekly Newsletter

---

Anne-Françoise Pelé

Anne-Françoise Pelé is editor-in-chief of EE Times Europe.

Tags: Analog, Artificial Intelligence, Embedded, ICs/Chips, IoT, MCU, Memory, MEMS & Sensors, Military & Aerospace, Power Management, Quantum, SoC, Startups, Test & Measurement, Wireless

Continue Reading

Previous Intel Unveils Phase One of €80b Pan-European Investment PlanNext Innova Emerges From Stealth With Design Flow, Resource Management Portal