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Semiconductor firms call for EU Chips Act 2.0

Daniel Nenni

Daniel Nenni

Admin
Staff member
fe151b538fb03233d4574ba94224c4c6

FILE PHOTO: Illustration picture of semiconductor chips on a circuit board · Reuters


AMSTERDAM (Reuters) - Computer chip makers and semiconductor supply chain firms on Wednesday called on the European Commission to launch a new support program as a follow up to the 2023 Chips Act, this time focusing on chip design, materials and equipment, in addition to manufacturing.

Following a meeting with top sector firms and European lawmakers in Brussels, industry groups ESIA, representing chipmakers, and SEMI Europe, representing the broader industry, said they would send their plea for a 'Chips Act 2.0' to Commission digital chief Henna Virkkunen.

A new program should "decisively support semiconductor design and manufacturing, R&D, materials and equipment," SEMI said in a statement.
Among more than a dozen firms represented at the meeting were chipmakers NXP , STMicroelectronics, Infineon and Bosch, equipment makers ASML and ASM, Zeiss and Air Liquide.

The Commission has yet to detail its plans for the semiconductor industry, though it has said it intends to launch five packages this year spurring European investment, notably in AI.

The first EU chips act prompted a wave of investment in manufacturing, but failed to attract cutting-edge chipmakers or address the rest of the supply chain. Most funding was provided by member states, yet projects needed EU approval -- a model criticized as too slow. Still European firms say it provided a counterweight to larger state support programs in the U.S. and China.

Last week a group of nine European countries said they would form their own coalition alongside the Commission to strengthen Europe's chip industry.

In November, ESIA chief Rene Schroeder told Reuters a Chips Act 2.0 would need to consider how to defend European chipmakers' leading position in "legacy and foundational" chips such as sensors, power chips and microcontrollers, an area where China is rapidly expanding.

Representatives of three major factions in the European Parliament hosted the Brussels meeting.

 
Daniel Nenni said:
fe151b538fb03233d4574ba94224c4c6

FILE PHOTO: Illustration picture of semiconductor chips on a circuit board · Reuters


AMSTERDAM (Reuters) - Computer chip makers and semiconductor supply chain firms on Wednesday called on the European Commission to launch a new support program as a follow up to the 2023 Chips Act, this time focusing on chip design, materials and equipment, in addition to manufacturing.

Following a meeting with top sector firms and European lawmakers in Brussels, industry groups ESIA, representing chipmakers, and SEMI Europe, representing the broader industry, said they would send their plea for a 'Chips Act 2.0' to Commission digital chief Henna Virkkunen.

A new program should "decisively support semiconductor design and manufacturing, R&D, materials and equipment," SEMI said in a statement.
Among more than a dozen firms represented at the meeting were chipmakers NXP , STMicroelectronics, Infineon and Bosch, equipment makers ASML and ASM, Zeiss and Air Liquide.

The Commission has yet to detail its plans for the semiconductor industry, though it has said it intends to launch five packages this year spurring European investment, notably in AI.

The first EU chips act prompted a wave of investment in manufacturing, but failed to attract cutting-edge chipmakers or address the rest of the supply chain. Most funding was provided by member states, yet projects needed EU approval -- a model criticized as too slow. Still European firms say it provided a counterweight to larger state support programs in the U.S. and China.

Last week a group of nine European countries said they would form their own coalition alongside the Commission to strengthen Europe's chip industry.

In November, ESIA chief Rene Schroeder told Reuters a Chips Act 2.0 would need to consider how to defend European chipmakers' leading position in "legacy and foundational" chips such as sensors, power chips and microcontrollers, an area where China is rapidly expanding.

Representatives of three major factions in the European Parliament hosted the Brussels meeting.

Click to expand...
[QUOTE="Daniel Nenni, post: 83531, member: 5"] 103646542.html[/QUOTE]

There are a lot of layoffs in Europe this year projected or happened already.

Siemens announced 6k more yesterday.

I guess these Companies want the EU to foot the bill for job retention
 
Barnsley said:
There are a lot of layoffs in Europe this year projected or happened already.
Siemens announced 6k more yesterday.
I guess these Companies want the EU to foot the bill for job retention
Click to expand...

Do you think CHIPs Act 2 is going to work for the EU while the US is using tariffs to stimulate manufacturing?
 
Daniel Nenni said:
Do you think CHIPs Act 2 is going to work for the EU while the US is using tariffs to stimulate manufacturing?
Click to expand...

Where is the EU Internal Market!

Infineon/STMicro and others are busy building entire ecosystems within China.

Once that market is gone for the EU Foundry how they going to replace it?

Rapid expansion in India?
 
Barnsley said:
Where is the EU Internal Market!
Infineon/STMicro and others are busy building entire ecosystems within China.
Once that market is gone for the EU Foundry how they going to replace it?
Rapid expansion in India?
Click to expand...

Will the EU continue the on-shoring semiconductor manufacturing efforts? My guess would be no. They have already scaled back, right?

AI is propping up semiconductors but consumer spending will probably take a big hit due to the tariff wars and government trimming in the US. We probably have a year or two of Fear, Uncertainty, and Doubt ahead of us. Any country that depends on US spending will suffer for sure. A recession in the US is a real possibility.

The semiconductor industry is still expanding but the non-EUV based capacity China has built up with the massive equipment purchases ($170B in the last 5 years) is coming online and will flood the market. Tariffs might be a good thing in this instance? Block China from flooding the market with cheap chips?
 
Daniel Nenni said:
Tariffs might be a good thing in this instance? Block China from flooding the market with cheap chips?
Click to expand...

While I am 110% pro domestic production and protecting local markets, I am not convinced tariffs will help to resolve the European issue.

I am taught to solve the problem at the root cause, and I don´t think tariffs will help European chip vendors to develop 1) more competitive products for a 2) competitive market.
It will give them time, yes. But at current speed in Europe China will likely only expand its lead. Currently I see many vendors building up second source back-end production so country of origin of their chips will be non-Chinese. This way tariffs can easily be avoided and money still ends up in China.

I fear the only way for Europe is to commit to on-shoring and aggressively hand out subsidies for companies willing to support this idea. One might wonder how much money is available for such plans if you consider other financial liabilities such as aging demographics, military/defense, etc.
 
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