The semiconductor industry in Europe provides quality employment and contributes to the EU’s open strategic autonomy. We must not lose any more market share to our global competitors.

The last months have shown how vulnerable global supply chains can be. A global shortage of semiconductors has led to production stops in many sectors of the manufacturing industries, the automotive industry being one of the most prominent examples.

Policy makers at both the EU and Member State levels have decided to act. On 19 June, the EU launched an Industrial Alliance for Processors and Semiconductor Technologies. And in her State of the Union address, President, Ursula von der Leyen, announced a European Chips Act.

It is, however, still unclear what focus the European Chips Act will have, and what implications it will have on the European semiconductor industry and its workers. In a position adopted by its Executive Committee on 1 December, industriAll Europe calls for an integrated strategy for the European semiconductor industry that not only takes into account specific segments of the branch, but also addresses social aspects and the regional dimension.

The public debate often focuses on node size as the only decisive criterion for EU funding. Promoting the cutting-edge segment from 16 nanometres (nm) to 10 nm and from 5 nm to 2 nm is the stated aim of the EU’s strategy. This is, however, an inadequate approach, as it ignores the realities of the industry and customers’ requirements. The supply chain issues of today are not in this cutting-edge segment, and European industry will continue to rely heavily on a node-size that is larger than 16 nm.

A comprehensive industrial strategy for the European market is therefore needed to make sure that the new support measures will eventually meet a European demand for chips, and that the chips produced meet the right criteria. The starting point of such a strategy should be a thorough analysis of the current and the future market demands, combined with a detailed concept of which industrial devices, applications and services should be produced and provided in Europe, and which types of semiconductors will be needed. Based on this analysis, a decision could be taken about which specific technologies should receive dedicated public funding.

This approach will contribute to solving the semiconductor shortages of today, if only in the long run, and also contribute to a strong global position of the European industry in the future. In both cases, this will mean taking bold investment decisions and ramping-up production capacities for both the trailing- and the cutting-edge segments.

Isabelle Barthès, industriAll Europe Deputy General Secretary:

“The semiconductor industry in Europe provides quality employment and contributes to the EU’s open strategic autonomy. If we want to maintain this, the EU and the Member States need to take bold investment decisions – and they need to take them now. We must not lose any more market share to our global competitors.”

“The supply chain problems of today can only be solved if the customer industries are also part of the solution. The automotive industry particularly has to reconsider its just-in-time production model, which has obviously reached an impasse with regard to the supply of semiconductors. Supply chain resilience will also mean building-up stockpiles and respecting the sanctity of contracts.”

IndustriAll Europe position paper: 'The European semiconductor industry needs a well conceived strategy': EN, DE, FR

Contact: Andrea Husen-Bradley (press and communication), Jan Brauburger (policy adviser)