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EETE MAR 2014

ISS europe report Europe’s ‘Airbus of chips’ taxis to take-off position By Christoph Hammerschmidt Almost two years after EC commissioner Neelie Kroes aired the idea of creating a pan-European industry initiative to transplant the continent’s success in aircraft building to the semiconductor business, the industry gets moving. At the SEMI Industry Strategy Symposium (ISS Europe) in February in Salzburg, semiconductor bigwigs set the course. A few days ahead of the meeting in Salzburg, the European Commission published a roadmap which defined technology areas in which Europe’s industry is strong enough to let Kroes’ high-flying goals appear realistic. The EC Commissioner for the Digital Agenda aims high: within the next ten years, the European economy can double the value of chips produced here, she believes. In other emerging markets, for example in the Internet of Things, European companies should be able to grab 60 percent of the worldwide business by 2020. And in technology segments where Europe lost its past glory like mobile and wireless communications, the EC hopes that European companies reinvigorate and capture 20 percent of the projected future growth. These are the goals. The roadmap details the industry segments where Europe can realistically entertain hopes for a global leading position, and defines which action to take Infineon CEO Reinhard Ploss: “No competition on lowest price” in order to win or defend such a top position. These segments are automotive, energy, industrial automation, security and intellectual property as well as semiconductor materials and equipment. At the same time, the paper defines future growth areas where the European semiconductor industry should stake its claims: besides the Internet of Things, these growth areas include what the experts call Smart-X markets - with X standing for things like homes, grids and similar notions. All these figures and definitions result from consultations within the Electronics Leaders Group (ELG) which Neelie Kroes brought into being about a year ago. The ELT comprises eleven top executives from major European chip making companies, equipment manufacturers and research organisations. At the ISS in Salzburg it was apparent that the roadmap provides a common ground for the European industry for future action - noone of the participants seriously questioned Globalfoundries Dresden CEO Rutger Wijburg: “Additional capacity of 250.000 wafers per month is needed” the paper. Nevertheless a panel discussion at the meeting with industry pundits - and some of them also were ELG members - showed that there is still a significant need to clarify the details of the way ahead. “Europe clearly recognizes that micro and nano electronics is a key enabler for many of the technologies in which it wants to be a top player”, said Infineon CEO Reinhard Ploss. “To achieve the goals described we do not only have to focus on chip manufacturing - it is also a matter of differentiating in end markets and competence. It seems clear to me that we also have to create new markets for our chips.” He added that the first priority is to develop outstanding technology - then the production can be retained in Europe, not the other way around. Ruther Wijburg, CEO of Globalfoundries Dresden and like Ploss an ELG member pointed out that Europe already has a “brilliant platform” to start from, referring to the existing manufacturing base. Wijburg however pointed out that the need of Europe and the need of a company that has to act globally is not necessarily 100 percent identical. “A company like us always has to make its decisions on a global basis.” He nevertheless agreed that in automotive and other market segments like medical electronics there are enormous business chances in Europe. In order to achieve the goals defined in the roadmap, the chip industry would have to add a manufacturing capacity of 250.000 wafers per month - the equivalent of three fabs the size Globafoundries currently operates in Dresden. Would such a capacity translate into a predatory competition on a global scale? No, Wijburg said. “With such a production capacity we certainly would take away market share from Asia, but not volume” - the global demand would grow even faster. For Joel Hartmann, Executive Vice President Manufacturing at STMicroelectronics, the initiative is perfectly in line with the company’s strategy. “This is a good opportunity to strengthen our R&D network”, he said. Marcel Annegarn, Director General of the AENEAS, the successor organisation of ENIAC, added a critical remark: “The report describes more a mission than a strategy”, he said. “There is much more funding, taxation and legislation needed,” he believes. In a meeting where business and technology should dominate, his remark called to the observer’s mind that after all the 10/100/20 program is still a political thing - and that the roadmap is not only driven by technology aspects but also by political desire. So what will be the next steps for the European semiconductor industry? The industry will increase its R&D efforts - but this alone will not be enough, Wijburg pointed out. “R&D is important - it helps to create the next markets”, he said. But in order to achieve the goal or a stronger market share on a global basis, the entire value chain has to be strengthened. This will require massive investments”. Reinhard Ploss highlighted another important aspect: the technology and products that eventually will be created as a result of the program must be far enough ahead of the global competition to be safe from commoditizing. “Do we want to compete on low cost?” Ploss asked. “Certainly not”, he answered his rhetorical question. “This would not be a long-term successful strategy”. 6 Electronic Engineering Times Europe March 2014 www.electronics-eetimes.com


EETE MAR 2014
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