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EETE NOV 2013

UNCOMON MARKET Must manufacturing leave Europe? By Peter Clarke europe stands at a crossroads with regard to electronics manufacturing. Some would say it is already too late, at least for some aspects of manufacturing. IC manufacturing at the leading edge is done in volume in Taiwan and South Korea and North America. And it has been argued that once manufacturing goes, design will follow. What will this leave for working-age Europeans to do, apart from washing each other’s linen? Show tourists around our heritage sites and flip burgers for them? One of the news items is that the IC test and assembly plant belonging to Unisem Berhad (Kuala Lumpur, Malaysia) in Crumlin, South Wales, will close by the end of the year with the loss of 45 jobs unless some white knight rescuer can be found. While the number of jobs is not large on continental scale the site is representative of a downward trend in European IC manufacturing that needs to be reversed. The site was built in 1995 for IC manufacturing and designed to employ 1100 people and to operate 24 hours a day and seven days a week. It has retreated to low volume specialist work but nonetheless it is one of few sites left in Europe that does full assembly production and test from wafers in, through initial probing and on to die-bonding and packaging. How long before NXP moves to Singapore? Another news item that caught my eye concerns NXP Semiconductors NV (Eindhoven, The Netherlands) formerly the semiconductor division of Philips Electronics. In September it was revealed that Singapore would become NXP’s global headquarters for operations in a move to align NXP with its growing Asian customer base. CEO Rick Clemmer has in the past said that NXP is practically a Chinese company because of the number of people it employs there and the strength of its shipments into China. Meanwhile NXP is expanding its corporate R&D in Singapore. How much longer before NXP ceases to be a Dutch company and moves entirely to Singapore? Meanwhile we have European Commissioner for the digital agenda, Neelie Kroes, saying she is willing to spend more than €5 billion of European tax payers’ money across the semiconductor value chain over the next seven years. “Raspberry Pi has shown that with the right product addressing a global market European manufacturing not only makes sense, but can show a lead to the world.” Kroes wants Europe to more than double its market share in IC manufacturing up to 20 percent. Ms Kroes is appealing – and it would seem almost desperately – for European companies to come together in some way to try and recreate the success of Airbus Industrie. But Airbus was a different case. The national champions that existed at the turn of the millennium had the technical capability and focused interest in manufacturing aircraft. Bringing them together to achieve critical mass on a global scale made sense and has worked. In contrast, the likes of Infineon, STMicroelectronics and NXP have tended to pursue a fab-lite manufacturing policy. One could argue that IC manufacturing is too far gone to be recoverable. And this is because the indigenous companies have not shown anything like the ambition to match that of Commissioner Kroes who wants Europe to compete at sub-20-nm IC manufacturing and in manufacturing on 450mm diameter wafers. This leaves Ms Kroes is in the difficult position of having very few players to whom she can hand out funds to try and help achieve her strategic vision. Start with the customers It is my belief that support measures, however large, will not change how Europe fares in manufacturing. What will change is when European companies in manufacturing have the will to compete on a global stage. And when European investors see the opportunity to create value by making things despite its capital intensity. And yet there are examples of manufacturing that can give Europeans cause for hope. The one millionth Raspberry Pi $35 computer board was produced in September at the Sony manufacturing plant at Pencoed, South Wales. Raspberry Pi boards were originally made in China but the long communications channels meant the Raspberry Pi Foundation was open to an approach from Sony to perform local manufacturing. Sony is reportedly producing 12,000 units per day and has had to employ 40 extra staff to cope with demand and the boards are being exported globally. Board-level manufacturing is not the same as IC packaging, which in turn is not the same as front-end wafer processing. But Raspberry Pi has shown that with the right product addressing a global market European manufacturing not only makes sense, but can show a lead to the world. 4 Electronic Engineering Times Europe November 2013 www.electronics-eetimes.com


EETE NOV 2013
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