Marc Biron, Melexis: Chip shortages and the EU Chips Act

Marc Biron, Melexis: Chip shortages and the EU Chips Act

Interviews |
By Nick Flaherty

Belgian fabless chip maker Melexis has been at the heart of the chip shortage, and sees no sign of it stopping.

“From an education point of view, semiconductors are the new gold,” Marc Biron, CEO, tells eeNews Europe. “Your car, your PC, your phone, your PS5, these are all fantastic equipment thanks to the semiconductors. Now with the chip shortage and the CHIPS Act semiconductors are much more in the spotlight so it’s important to recreate an ecosystem in Europe and that is currently very weak.”

The company has the vast majority of its business in automotive, with Hall effect and time of flight sensors built by European foundry X-Fab, and the shortage has led to significant changes to the business.

“We have been involved in the semiconductor shortage and the mismatch between supply and demand. We have had discussions with suppliers and customers to match as much as possible the demand and supply and allocate in the best way we can,” said Biron. He took over at in August 2021 from Françoise Chombar, who is now chair.

The company saw sales of €219m ($219m) in the last quarter, up 5% on the previous quarter and 35% on the year before. It expects sales in the fourth quarter to be around €220m, giving growth of around 29% for the full year.

“Sales in the third quarter of 2022 came out at the high end of the guidance, triggering another full-year guidance increase. For an important part of our products, particularly future-oriented and innovative products addressing new car platforms, we are observing a continuous and strong growth, and demand still exceeds supply.

Chip shortages

The shortages have been a challenge for the business.

“It was very interesting as we had contact with OEMs we had never had contact with before and I think we will be build on that, but the vast majority of customers recognised Melexis did its best to resolve the problem, we had very open communication with everybody,” said Biron.

“Today the split is 90/10 automotive and moving to 80/20 but it is difficult to increase the non automotive business as we need to allocate the wafers to automotive customers,” he said, “So we are not talking about business creation but managing the shortage but I really believe that in the next months we will be back to the demand creation.

“All our innovative applications are still in allocation with a mismatch between demand and supply – we don’t see the end of this mismatch for these products,” he said.

“In the third quarter, the outperforming product lines were current sensors and drivers, steadily boosted by the high demand for applications used in electric vehicles. In addition, our ambient lighting products continue to thrive in automotive comfort applications.”

“Q3, Q4 and beginning of next year is in the same mode and we are in discussion for 2023 where the mismatch is still high on the radar – we need to work with the entire supply chain , it’s not just about the wafers, it’s also the packaging, assembly, the test capacity in Melexis, we need to work on all those aspects,” he said.

“We need to increase the test capacity in Melexis with new equipment and the lead time for that equipment is quite long. The fab [in Corbeilles] is one of bottleneck but there are other elements in the supply chain and we are working on those every day,” he said.

Melexis uses the X-Fab plant in Corbeilles with 0.35um and 0.18um SOI and CMOS process technologies. The latest XT18 process is being transferred to Corbelles which started this year and will continue for new products and SOI in 2023.

“For the more traditional products we see stabilisation.  Increased capacity and an easing demand for some applications moved us towards a more balanced supply and demand over the last couple of months,” he said.


China is an important market for the company, along with Korea and Asia but is not impacted by the supply chain or trade issues, he says.

“From a pure supply chain perspective Melexis is almost immune as we do not use Chinese suppliers, the vast majority of assembly is not in China, and all our test and probe is not in China so we have not been affected,” he said.

“We do have a business creation team in China and we adapted our way of working linked to Covid,” he said. “We are doing well, we are still able to generate a lot of new opportunities and close some design wins. What is important is China is leading the pack in electrification with more electronics in vehicles so this business is important.”

“For the US restrictions the main focus is military and 5G communications as well as AI and those are not our focus, automotive is not impacted by those restrictions. But for some customers and some specific products we had to ask for an export license and we have received that for at least three different products,” he said.


The Chips Act currently going through the European Parliament is a key opportunity, highlighting the same areas as Silicon Europe.

“In general we welcome it as it’s really important to put the semiconductors in the spotlight in Europe,” he said. “I would say there are three pillars in the Chips Act.”

“There is the investment in fab capacity and we are fabless but we will benefit from increased capacity if it is relevant for Melexis. Tomorrow we will work on 0.11um and in some years it will be 90nm and perhaps 50nm. If the new nodes are around those nodes Melexis will benefit, rather than the 2nm fabs.”

“The second pillar is startup investment, especially for assembly and heterogeneous packaging and pilot lines. This would be beneficial as today this is done in Malaysia and if we could be closer to the development team we would be much more efficient and probably more innovative.”

“The third pillar is education. It’s extremely important, there is a lack of talent in general and especially with a semiconductor background as semiconductors have disappeared from the education system and I hope the CHIPS Act will help create an ecosystem around education.”

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