Development of the EU Semiconductor Market - Chips Act
Market News

Development of the EU Semiconductor Market - Chips Act

The EU not only does not have the most advanced fabs, but the production capacity of packaging and testing plants is also concentrated in China and Taiwan, and the EU is lagging. By promoting the "Chip Act", the EU is expected to help the EU semiconductor industry to catch up.
Published: Apr 15, 2022
Development of the EU Semiconductor Market - Chips Act

Affected by the US-China trade war, global political situation, protectionism, and the epidemic, the global semiconductor supply chain have gradually changed to a short chain, focusing on local production and local supply. The semiconductor industry is viewed as a global ecosystem of thousands of companies, not just a collection of a few large fabs.

Semiconductor Related Policies:

  • The goal of the European Chip Act is to increase the market share of the EU's global semiconductor market from 10% at the current stage to 20% by 2030.
  • The CHIPS for America Act proposal provides for $52 billion in subsidies and loans for semiconductor wafer manufacturing and R&D by November 2026.
  • China is accelerating the reduction of the technological gap with other semiconductor powerhouses. According to a series of strategic goals of "Made in China 2025", it is expected that China will invest 150 billion US dollars in the semiconductor field by 2025.
  • Japan announced in the mid-2021 that it will provide US$8 billion in state funds for its semiconductor industry investment to supplement additional funds for its semiconductor industry.
  • South Korea announced in May 2021 that it will support private investment in R&D and manufacturing by domestic companies through tax credits to support the semiconductor industry by $450 billion in 2030.
  • Since January 2019, Taiwan has successively promoted the "Three Major Plans for Investing in Taiwan". Under the betting of Taiwanese businessmen returning to Taiwan to invest a lot of money, the government plans to build Taiwan into "high-tech R&D", "Asian high-end manufacturing", "Asian high-end manufacturing" Semiconductor Advanced Process" and "Green Energy Development" 4 major centers. For the semiconductor advanced process center, strive to achieve an output value of 180 billion US dollars in 2030.

EU - Chips Act

Although Europe plays a key role in the global semiconductor supply chain for key semiconductor equipment, wafer raw materials, and advanced IP design. In the past, the establishment of the overall semiconductor industry chain was ignored, and the integration was insufficient, resulting in a low chip self-sufficiency rate.

The European Union launched the Chips Act, which aims to double Europe's global chip market share to 20% by 2020. Nearly 10 years later, the EU chip market share is still around 10%. Taking this a step further, Europe no longer produces the most advanced chips used in data centers or smartphones. The European Union has decided to adjust amid a global shortage of chips and industries that are increasingly relying on them.

The EU formally proposes the "Chips Act" in 2022. According to the "Chip Act", the government and the private sector will invest more than 43 billion euros in the development of the chip industry, which is like the investment budget for the chip industry passed by the US Congress. More than two-thirds of this money will be in the form of state grants to encourage manufacturers to build new cutting-edge wafer factories or mega fabs, and the rest will be poured into infrastructure related to chip manufacturing. It is expected to double the global market share of European chips and ensure the security of the European chip supply.

Things Semiconductor Industry Players Should Think About:

The R&D process in the semiconductor industry is long, often several years and billions of dollars in investment. The new chips are designed by manufacturers who specialize in designing chips with complex software that is made by other companies. After the wafer is fabricated, it is handed over to a contracted manufacturer for assembly testing (ATP). From an ecosystem perspective, the European Union remains a leader in semiconductor research and development, and European companies are responsible for the production of many of the important equipment needed for fabs.

Half of the EU's wafer production capacity is made of wafers above 180nm, although it lags the current state-of-the-art wafers. But advanced chips made by TSMC and Samsung are mostly used in consumer electronics, most of which are assembled in Asia. Conversely, the wafers produced by European fabs are sufficient to supply many local manufacturers and can be used in automobiles, machinery, and sensors. European chip fabs also have a business-focused customer base.

The EU seeks to build a healthy industry ecosystem with semiconductor companies such as Taiwan. The industry should think from the perspective of the overall European industry development and seize the opportunity for layout. The EU hopes to attract more investment to join the ranks of European chip production, one is the chip production organization in the one-stop manufacturing of brand owners, and the other is the foundry factory; if the qualified chip production organization can be selected, it will be beneficial to European countries set up factories to invest and get various preferential treatment.

The EU itself has a robust automotive and sensor industry. At present, there are three main types of end-user markets in the EU; one is the computing industry based on cloud data computing centers, the other is the communication and network infrastructure industry including the Internet of Things, and electronic power applications, and automobiles, etc. industry. Before Taiwan's semiconductor industry considers entering the European market and enjoying relevant preferential subsidies, the industry must think from the perspective of the development of the overall European industry to win among all competitors.

Published: Apr 15, 2022 Source :cw

Further reading

You might also be interested in ...

Headline
Market News
Analysis of the Global Production and Sales Development of Automobiles and Components from the German Automobile industry
The German automotive industry has always been a core industry in driving employment, economic growth, and maintaining global competitiveness.
Headline
Market News
Understand the Steel Industry Chain and its Market Status
The iron and steel industry are an industrial industry mainly engaged in industrial production activities such as ferrous metal mineral mining and selection and ferrous metal smelting and processing. Including metal iron, chromium, manganese, and other minerals mining and dressing industry, ironmaking industry, steel processing industry, ferroalloy smelting industry, and other sub-sectors. It is one of the country's important raw material industries.
Headline
Market News
Embracing the New Normal of Remote Working: Analysis of the Global Video Conferencing Equipment Market
Even if the epidemic slows down, video conferencing will have the opportunity to become the new normal in the future. Although the relevant system equipment manufacturers have suffered the impact of the epidemic, they are actively grasping the turning point of the industry.
Headline
Market News
How is the Internet Medical Industry Profitable?
Digital innovation is rapidly helping transform modern industries. Healthcare providers in hospitals and healthcare systems are applying these tools to promote public health, reduce costs, and improve experiences.
Headline
Market News
Respiratory Protective Equipment for Safety and Health
For many people working in hazardous environments and confined spaces, the correct respiratory protective equipment (RPE) is critical to maintaining health and safety and protecting lives. Respiratory protective equipment is indispensable protection.
Headline
Market News
Expansion of Economic and Trade Business Opportunities in Central and South American Markets
Latin America not only has a vast territory, rich natural resources, sufficient consumption capacity, and market potential but also has successfully promoted regional economic integration over the years, investment and trade opportunities cannot be underestimated.
Headline
Market News
Indispensable Mechanical Transmission Equipment in the Machinery Industry
In the past few years, with the continuous improvement of technologies such as artificial intelligence (AI), deep learning (DL), computer vision (CV), virtual reality (VR) and augmented reality (AR), the application scope of mechanical transmission components has expanded to each field.
Headline
Market News
What is the Electrical Supply Industry and its Market Development?
Electricity is an important driving force for economic and social development and plays a vital role in the national economy. The equipment used in the electric supply industry is essential for maintaining the stable and reliable operation of the power system.
Headline
Market News
Current Situation and Trend of Taiwan's Solar Energy Industry
With the rise of global awareness of environmental protection, the development of new energy sources to replace the old power generation methods has become one of the important development goals of governments in various countries. One of the least polluting methods of generating electricity is with solar energy.
Headline
Market News
Rapid Development of the Smart Drone Market
With the continuous development of drone technology, the expansion of their commercial applications, and the increased use of drones in industrial fields, their commercial value will continue to grow. The development of Smart Drones has led the industrial drone market to realize rapid growth in recent years.
Headline
Market News
The Lowest Car Production Level in the UK in 65 Years
According to figures from the Society of Motor Manufacturers and Traders (SMMT), car production in the UK last year fell to its lowest level since 1956.
Headline
Market News
Economies with Growth Momentum - Central America
Latin America and the Caribbean (LAC) will resume economic growth in 2022, after contracting by 6.7% in all countries due to the effects of the pandemic last year. The recession caused by the epidemic will take years to recover from, and those living in poverty will continue to be the most affected.
Agree