US and EU on collision course over semiconductor industry

February 12, 2021 // By Nick Flaherty
US and EU on collision course on semiconductor industry
The EU is set to clash with the US over semiconductor strategy for 5G and 6G, processor and cloud technology

The US semiconductor industry has published a letter calling on new president Joe Biden for support, putting it on a collision course with the European Union’s plans similarly to protect chips as a critical supply chain.

“Semiconductors power essential technological advancements across healthcare, communications, clean energy, computing, transportation, and countless other sectors, and chip-enabled technologies have helped keep us productive and connected during the pandemic,” said John Neuffer, president and CEO of the Semiconductor Industry Association (SIA) that coordinated the letter. 

“By investing boldly in domestic semiconductor manufacturing incentives and research initiatives, President Biden and Congress can reinvigorate the US economy and job creation, strengthen national security and semiconductor supply chains, and ensure the US remains the leader in the game-changing technologies of today and tomorrow,” he said. 

The SIA points to the share of global semiconductor manufacturing capacity in the US decreasing from 37 percent in 1990 to 12 percent today. This decline is largely due to substantial subsidies offered by the governments of global competitors, which have placed the US at a competitive disadvantage in attracting new fab construction, says Neuffler. US federal investment in semiconductor research has also been flat, while other governments have invested substantially in research initiatives to strengthen their own semiconductor capabilities, he says. This follows announcements from TSMC of a 5nm fab in Phoenix, Arizona and a 3nm fab by Samsung in Austin, Texas. 

A report from influential German consultancy Roland Berger released yesterday calls for more collaboration with partner companies to build fabs in Europe and highlights the importance of ARM’s technology. At the same time Qualcomm has objected to regulatory authorities in the UK, Europe, China and the US over ARM’s acquisition by rival Nvidia.

At a speech yesterday, EU commissioner Thierry Breton was aggressive in pushing back on the US plans. “Since when does talking about industrial policy equal protectionism?” he said. “We need to bring more seriousness and context to such criticism. Ultimately, it is for us to decide."

Next: Key semiconductor areas to be announced 

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