EE Times Europe : EU Chips Act: After Theory, Practice

EE Times Europe : EU Chips Act: After Theory, Practice

The European Chips Act was slow to promise but has been quick to perform.

The legislation was hammered out amid mounting pressure and growing impatience. Some raised their voices for faster adoption. The pathway to digital sovereignty is still long and winding, but it is worth noting the first steps taken to revive Europe’s sagging semiconductor manufacturing industry.

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“The Chips Act is in action, bringing every day more industrial sovereignty for our continent,” said Thierry Breton, European commissioner for the Internal Market, after STMicroelectronics and GlobalFoundries signed a memorandum of understanding to build a 300-mm semiconductor manufacturing facility in Crolles, France, that will help develop the ecosystem for fully depleted silicon-on-insulator (FD-SOI) technology.

The €5.7 billion fab will support GlobalFoundries’ 22FDX FD-SOI process technology and STMicroelectronics’ technology roadmap down to 18 nm for automotive, industrial, IoT, and communications infrastructure applications.

FD-SOI has its roots in the Grenoble area and has been a key R&D focus at CEA-Leti for more than 20 years. It was considered critical to go beyond theoretical research and begin reaping the fruits of
cutting-edge chips “Made in Europe.”

Breton commented, “As we have seen with [Covid-19] vaccines, there is no point in being a leader in research if you cannot produce. There is no industrial leadership without a factory.”

The Chips Act also came into play when Intel unveiled its €80 billion investment plan in Europe. The initial phase, which represents a €33 billion investment, includes two fabs in Magdeburg, Germany, to produce chips using Intel’s Angstrom-era transistor technologies and serve the needs of both foundry customers and Intel for Europe and globally as part of the company’s IDM 2.0 strategy.

At the time, Intel was subject to construction permit requirements, but CEO Pat Gelsinger confidently stated, “Our hope is to begin construction in the first half of 2023 and produce state-of-the-art products in 2027.”

That was before Intel reported disastrous results for the second quarter and no signs of improvement for the third quarter and the full year 2022. What will happen if the U.S. semiconductor giant doesn’t get back on track soon? Has Gelsinger bitten off more than he can chew? Might he be forced to scale back his ambitions in Europe?

In the meantime, the EU has been courting Taiwan, a “like-minded partner” with which it could “collaborate on strategic sectors like semiconductors — the new oil” to “achieve goals of the European Chips Act,” as EC executive vice president Margrethe Vestager pointed out in a European Parliament Plenary Session in late 2021.

The EU has also rolled out the red carpet for Taiwan Semiconductor Manufacturing Co. (TSMC), and for good reason.

Firmly in the pole position, Taiwan will account for 66% of the global foundry market in 2022, up from 64% in 2021, according to a recent report by market research firm Trendforce. Of that market, TSMC will hold 56% this year, up from 53% last year.

Hopes were high when TSMC said in June 2021 that it was in the early stages of investigating a potential expansion into Germany. But it was a blow to the EU a year later when TSMC president Mark Liu said, “In Europe, we have relatively fewer customers, but we are still evaluating and still have no concrete plans.”

Europeans should not lose heart, however. The success of the European Chips Act does not depend solely on foreign investment. The European semiconductor manufacturers are to be commended for their commitment to bolstering Europe’s competitiveness and resilience. Besides ST’s fab extension in Crolles, Infineon Technologies inaugurated a €1.6 billion chip factory for power electronics on 300-mm thin wafers in Villach, Austria; Soitec laid the foundation stone of Bernin 4, a manufacturing facility for silicon carbide wafers; and Bosch plans to invest another €3 billion in its semiconductor division by 2026.

Equally commendable is the ability of 27 European states, with different stakes and resources, to explore, articulate, and implement a common vision for Europe’s semiconductor sovereignty.

There is strength in unity.

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