![Ursula von der Leyen, the president of the European Commission, explains about a bill for the expansion of semiconductor production in Europe at the European Union headquarters in Brussels, Belgium in February of last year. Ursula von der Leyen, the president of the European Commission, explains about a bill for the expansion of semiconductor production in Europe at the European Union headquarters in Brussels, Belgium in February of last year.](http://www.businesskorea.co.kr/news/photo/202306/116847_132791_2421.jpg)
Ursula von der Leyen, the president of the European Commission, explains about a bill for the expansion of semiconductor production in Europe at the European Union headquarters in Brussels, Belgium in February of last year.
Following East Asia and the United States, Europe is emerging as the new battleground for semiconductors. Since Europe unveiled its intention to exert influence in the global supply chain by leveraging its top-tier domestic semiconductor equipment and automobile semiconductor companies, leading global semiconductor companies, including TSMC and Intel, have confirmed substantial investments in the region. The contest for dominance in the semiconductor sector has grown more complex, as even the European Union (EU) has set its sights on this realm.
The key partner in Europe’s semiconductor revival is Intel. On June 18 (local time), the company announced that it would invest $25 billion (approximately 32 trillion won) to build a new semiconductor factory in Israel, which is the largest foreign investment in the history of Israel. Although Israel is located in the Middle East, it is effectively classified as part of the European semiconductor supply chain. Intel had previously declared an investment of 80 billion euros (112 trillion won or US$87 billion) to establish state-of-the-art semiconductor factories and research facilities across Europe. Intel’s Israel plant is expected to commence operation from 2027.
Intel is already operating large-scale semiconductor factories in Ireland and Germany. In addition, it plans to build semiconductor production and testing facilities in Poland and advanced semiconductor packaging and assembly factories in Italy. It also plans to establish research and development centers in France and Spain.
Intel, once dubbed the “Semiconductor King” as it dominated the PC semiconductor market, has struggled since the 2000s, failing to keep pace with new paradigms such as foundries (semiconductor manufacturing services), memory semiconductors, and Graphics Processing Units (GPUs). In Q1 of this year, amidst lackluster sales results, Intel reported the biggest quarterly loss in its history -- US$2.76 billion (approximately 3.5 trillion won) -- while increasing its investment size.
Europe is home to world-leading semiconductor equipment companies such as ASML in the Netherlands and IMEC in Belgium, as well as cutting-edge research institutions. Rapidly growing markets for power semiconductors and automotive semiconductors are led by European companies such as NXP in the Netherlands, Infineon in Germany, and STMicroelectronics in Switzerland. However, industry insiders point out the weakness that these companies, limited to certain areas and lacking advanced process technology, have no choice but to entrust production to Samsung Electronics or TSMC, making them “half-baked” enterprises.
The EU has thrown its hat into the ring by resolving to build advanced semiconductor production facilities - the “last puzzle piece” of its domestic semiconductor ecosystem. Intel’s massive investment aiming to rebuild its foundry business is expected to focus on the production sector. Industry insiders say Intel has secured a strong position in transactions with European automotive parts manufacturers like Mercedes-Benz, BMW, and Bosch.
The final hurdle, the issue of subsidies, also appears to be resolved. According to the Financial Times on June 18 (local time), the German government has virtually agreed to a proposal that provides more than the originally planned 6.8 billion euros (9.5 trillion won or US$7.4 billion) and up to 10 billion euros (approximately 14 trillion won or US$11 billion).
TSMC is also known to have recently gathered opinions on subsidy levels with the German government. TSMC is pushing forward with the construction of a 10-billion-euro semiconductor factory in Dresden, Germany. Although the German government initially expressed its refusal to further subsidy requests from Intel and TSMC, stating, “There's no more money,” it eventually changed its position in favor of Europe’s semiconductor revival.
Kyung Kye-hyeon, the head of Samsung's Semiconductor Business (DS) division, recently visited various European regions, including Tel Aviv in Israel, Munich and Stuttgart in Germany, Geneva in Switzerland, and Amsterdam in the Netherlands, to check on local business conditions. However, Samsung has not yet announced any plans to build a semiconductor factory. It appears that the company is already pursuing the construction of large-scale semiconductor factories in both Korea and the United States, and has judged that conditions have not been prepared in Europe to utilize advanced processes.
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Samsung Planning Semiconductor Plant in Europe?
Following East Asia and the United States, Europe is emerging as the new battleground for semiconductors. Since Europe unveiled its intention to exert influence in the global supply chain by leveraging its top-tier domestic semiconductor equipment and automobile semiconductor companies, leading glob
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