ZVEI calls for more investment in European semiconductors

ZVEI calls for more investment in European semiconductors

Business news |
By Nick Flaherty

“The ZVEI has worked on the IPCEI from the start and is currently working to ensure that the project picks up speed. Projects such as IPCEI, the European Chips Act, the European industrial alliance for processors and semiconductor technology have to be tackled as quickly as possible so that we can create an attractive investment climate in Germany and Europe, ”said Stephan zur Verth, chairman of the ZVEI specialist group on semiconductor components.

The Important Projects of Common European Interest (IPCEI) schemes have included backing for Infineon’s latest 300mm fab in Villach and the Hydrogen valley in the Nethelands but developments have been slow.

“It is positive that the coalition agreement of the coming government recognizes the important role of the semiconductor industry and wants to promote microelectronics as an important key technology. However, the announcement must be followed by swift action,” says the ZVEI.

“Only then will Germany and Europe continue to be among the seven regions active in the semiconductor industry worldwide in the future,” says Verth. According to Verth, there is no short-term political solution to the current supply bottleneck. It is important to concentrate on medium-term projects such as IPCEI for microelectronics and communication technologies. It must now be a question of securing Europe’s technological sovereignty in the long term. Above all, the economic and political framework conditions must be improved to achieve this. 

This has to capitalise on the recent growth in the semiconductor market.

“Worldwide, the semiconductor market is growing between 21 and 27 percent in the current year to 533 to 559 billion dollars,” said Verth “The drivers of this high growth are digitization and the green transformation with its great demand for CO2-reducing technologies”.

The European market is also developing very well in 2021 with growth of around 20 percent to $45bn, he says.

“In the coming year we expect an increase in sales in the range of four to ten percent to 556 to 615 billion dollars,” he said. “In Europe we are assuming an increase of eight percent to 49 billion dollars.”

The development in Germany is similar with high sales growth of around 20 percent to $14bn  dollars.
 In order to determine the position of Europe compared to the USA and China, Verth explains chip production in relation to the location of the semiconductor factory, design and development of chips, and electronics production where chips are built. About 23 percent of all chips are produced in factories in China, but most of them are not Chinese companies. Almost 8 percent of all chips are manufactured in Europe and around 10 percent in the USA.

Half of all chips worldwide are designed and developed by US companies. In contrast, only 5 percent of all chips are designed and developed by Chinese companies. Although the Chinese share of the world semiconductor market is small in terms of design and development, it is growing rapidly. With a share of 9 percent, Europe currently has almost twice as high a share as China.

In terms of electronics production, China is the world’s largest target market for semiconductor components, with every third chip is built there. In contrast, Europe’s share of the global semiconductor consumer markets is only 9 percent.

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