Europe needs to wake from its 30-year semiconductor sleep

February 21, 2021 // By Peter Clarke
Time for Europe to wake from a 30-year slumber
Peter Clarke looks back over three decades that have led the EU let multiple electronics systems industries wither and left Europe dependent on offshore chipmakers who do not always deliver.

Wafer fabs are significant engines of employment and technical development. Wafer fabs also produce the necessary hardware components for wealth creation and therefore for well-being; they are the strategic enablers of electronic systems as Volkswagen and others have recently been reminded.

The world's most technically advanced manufacturer of integrated circuits, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), doesn’t only make ICs in Taiwan. It also makes – or will make/assemble – chips in the US and China. TSMC has said it before and has now said it again. The company has no plans to start manufacturing chips in Europe. So, what is so different about the US, China and Japan?

Would that be the presence of globally significant makers of electronic products that value the leading-edge; a strong semiconductor ecosystem; and political clout that gets exercised from time to time? The automotive supply chai has highlighted the importance of that market.

What electronics products does Europe make in volume? That would be automobiles, courtesy of Volkswagen, Daimler, BMW and Stellantis BV, the holding company for Peugot, Citroen, Fiat and Chrysler.

Automobiles are amongst the most complex artefacts produced by humans, perhaps ranking only behind aircraft and spacecraft but the high premium set on safety means they almost by definition are not users of leading-edge hardware. So lengthy are the design and approvals processes that automotive companies nearly always use chip manufacturing processes behind the leading-edge.

But automotive semiconductors still rely on the fact that those technologies were previously pioneered for use in high performance computing and smartphones. This means generations of manufacturing processes have been characterized and debugged before they are augmented to meet automotive functional requirements and operating conditions. It is not really possible in the long-term to separate the leading-edge from what has come to be known as More-than-Moore.

Perhaps, the US, China and Japan have to an extent shaped – rather than merely endured – the tide of globalization so that they still have a strategic role to play? Taiwan and South Korea have certainly shaped their own technological destinies.

Next: Fortress Europe

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