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Brussels is about to unveil its plan for Europe to host 20% of the world’s semiconductor production by 2030. The envelope of nearly 50 billion euros is approaching the 52 billion dollars committed by United States.
At the end of January, Thierry Breton had set the course for Europe: to reach 20% of the world’s production of semiconductors by 2030. To this end, the European commissioner for the internal market is banking on research, skills and a stable geopolitical environment, which are all arguments to put forward with the major groups in the sector so that they invest in the Old Continent. The European strategy, called “Chips Act”, must be officially unveiled this Tuesday, February 8 in Brussels, but the outlines of the plan, which aims to promote state aid for the production of electronic chips, have already been specified by Thierry Breton. Once validated by the European Commission, this draft regulation will still have to be adopted by the European Parliament and the Member States of the Union.
To gain a place of choice on the world stage of semiconductors, the European executive plans to mobilize nearly 50 billion euros in the coming years, an envelope that is close to the 52 billion dollars committed by the States. United to support the development of this sector. In detail, 12 billion euros, half of which coming directly from the pockets of the European Union, will be put on the table for research and development. This sum aims not only to design the electronic chips of tomorrow, but also to finance pilot lines to ensure the large-scale production of the latter, knowing that a line alone represents an investment of more than one billion euros. .
30 billion euros in public aid to attract giants like Intel
If these 12 billion euros from Brussels are not intended to bring giant factories out of the ground, it is on the other hand the objective of the 30 billion euros of public aid, within the framework of the recovery plan. European Union, which the Member States will have to grant to major manufacturers in the sector capable of creating “megafactories”, like Intel, which wants to build the largest processor factory in the world in Ohio. Ten years, 100 billion dollars of investment, eight factories, and several thousand jobs at stake, here is the promise of the American founder for this gigantic production site of semiconductors across the Atlantic, which makes Europe dream. .
Last September, Pat Gelsinger, CEO of Intel, indicated that his group could invest 80 billion euros on the Old Continent over the next decade, in order to boost its semiconductor production capacity against TSMC and Samsung, the other two giants in the sector. Last year, he also said that the construction of a giant microchip factory would require eight billion euros in public subsidies. He was obviously heard by Thierry Breton. The American firm has indeed set its sights on Germany and the city of Dresden for its “megafab”, its new large production site in Europe, while Italy seems well on its way to hosting an assembly site. As for France, it could only be satisfied with a simple R&D centre.
Create three to five very large factories in Europe
While major manufacturers such as Intel will have the freedom to choose suitable locations for their factories, they will however have to supply the European market as a priority with the production from these factories in the event of tensions in the supply chain, so that that the Old Continent is not faced with a new shortage of semiconductors. The 30 billion euros coming from the public funds of the Member States must lead to the construction of three to five very large factories (“megafabs”). Thierry Breton would like Europe to enjoy a real “independence” in the sector, and not from a simple “autonomy”whereas for the moment it depends very largely on the production capacities of Taiwan.
Last brick of this major plan to boost the production of electronic chips in Europe, a fund of five billion euros launched by the European Investment Bank (EIB) to support start-ups in the sector and contribute to the creation of world champions. The Old Continent will need it, while the European semiconductor industry today represents only 10% of the world production of chips. As the market should double by 2030 and weigh 1000 billion dollars, this means that Europe will have to quadruple its own production to reach 20% on a global scale. The race against time is on.