Tech war is on despite US election
Leading chip makers are urging the European Union to respond to the US-China trade war, warning that the recent election of Joe Biden in the US won’t change things significantly.
“The tech war is on and Europe needs to play defence,” said Reinhard Ploss, CEO of German chip maker Infineon Technologies, speaking at the CEO summit at the virtual electronica trade show. “The technology dispute between US and China is a challenge for our continent.”
This is backed up by Kurt Sievers of NXP in the Netherlands. “Europe needs to act as a single block, no one country is a large enough market,” he said. The supply chain for components is not an issue, he says but he points to issues with IP and where it is developed. This is an area where Europe has key strengths.
Infineon is already shifting production out of China to avoid problems in the future if the trade war intensifies.
“We have a large share of revenue from China but its ‘not as big as it looks as a large proportion is re-exported,” said Plosser. “If there is further tension there will be a shift in the production chain and production could move to other parts of the world.”
This is already happening, says Helmut Gassel, chief marketing officer at Infineon at the company results yesterday.
“If we assume tension remains and increases, some international production will be moved out of China to other Asian countries so the market will not grow as fast in China,” he said. “We are focussed on revenue growth outside China, in Korea, the US and Japan. Our revenue in Japan for example will double and this will increase robustness. A portion of semiconductor revenue in China today will be generated in neighbouring countries and even in Mexico,” said Gassel.
Plosser sees digital as key for Europe.
“We also need regulations in the digital space that are in line with European values. Europe must do considerably more than it has so far,” he said. “Europe has to push forward with digitalisation and use it as a springboard for its own digital industry. We are looking at companies such as 5G where we are well positioned, but we have to ensure the technology benefit arrives in Europe and creates an industrial basis. Digital competence is something we have to expand on considerably,” he said. “I believe we have to continue to look to new issues to provide substantial funds to this effect. Digitalisation and the shared use of data is essential and only if countries in Europe cooperate which now is limited by regulatory rules.
“Our focus on data protection is a challenge and a hurdle but it can also be an opportunity,” he said. “Europe should be an area where we can use data safely.”
There is more at:
- TSMC approves $3.5 billion spending for Arizona fab
- US-China risks for wafer supply
- China set to block Nvidia-ARM deal
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