How Europe is strengthening its semiconductor ecosystem
Speech by Commissioner Breton - EU Chips Act launch event
Ladies and Gentlemen,
I am delighted to be here today, at the Chips for Europe event.
Semiconductors are the “steam engine” of the ongoing digital and green transformation of our economy. They are also at the centre of renewed industrial strategies in many of our countries and regions where strategic considerations for national security are reshaping – and rightly so – public support in this sector.
Our partners (notably USA, Korea, Japan) but also our systemic rivals (China) are investing heavily to support their own capacities.
Europe, which has a lot of assets in this field, cannot be, and will not be, a mere observer in any “underground technological battle” between blocks.
This is why I have pushed forward the EU Chips Act, setting two objectives:
Firstly, Europe must increase its share of a booming €1tn market (€500bn today) from the current 10% to 20% in 2030.
Secondly, Europe should invest in the most advanced semiconductors – so below 2nm: this is the market of the future.
Because being excellent in research is not enough. To be geopolitically relevant, and to create jobs for our fellow citizens, one needs to build factories and produce in Europe. This is the sense of the Chips Act, an innovative declination of the industrial policy at EU level.
With the Chips Act now agreed and as of today “launched”, we are sending a strong signal that Europe is open for business.
From this point, we will act on three fronts: research, supply chains and partnerships.
[Europe: a technological leader]
First, on research and technology.
The ambition is clear: to increase our global technological leadership.
Europe is already a research and technological powerhouse. A global leader. Any chip produced today – especially advanced chips – has European research and technology embedded into it.
That is the result of clear European but also national and regional strategies which decided to invest massively in creating the right ecosystems for decades now, creating the two most advanced technologies (FinFet and FDSOI). I am pleased to see the CEOs of IMEC and CEA/LETI here.
With the Chips Act, we will nurture this historical legacy, build on it, and expand our leadership: we will invest €11bn until 2030 into five main priorities.
Firstly , tomorrow, the Chips Joint Undertaking will launch the first calls, to support the establishment of four pilot lines. The Union and the Member States are committing an unprecedented investment of over €3bn in state-of-the-art European infrastructure, to bridge the gap from the lab to the fab for four critical and strategic technologies:
- extending Moore's law to the Angstrom area;
- scaling down towards 7nm in FD-SOI technology;
- the integration of several heterogeneous technologies and advanced packaging;
- next-generation wide-bandgap materials.
These pilot lines – which should be deployed as of summer 2024 – will be crucial strategic assets in preparing our industry for the years to come and maintaining Europe as the global hub for research and industrialisation.
Secondly, design. Through an integrated cloud-based design platform, we will make sure that our start-ups and SMEs have all the resources necessary to design innovative chips. In a world of fabless companies, custom silicon, and hardware-software co-development, dependence on designs “made elsewhere” is unacceptable. We will involve not only the traditional semiconductor industry but also key verticals such as automotive, industrial, and telecommunications.
Thirdly, innovation. We must harvest the capabilities of the many European SMEs active in this area. Through the Chips Fund, we will facilitate access to capital for scaling-up by leveraging more than €2bn.
Fourthly , we invest in competences and skills. Current investments in Europe will result in 25,000 new direct jobs. It is expected that until 2030, 350,000 vacancies in the semiconductor industry will not be filled because, as in other fields, Europe faces important skills shortages. Via the Chips Act, we will establish a European network of competence centres across the Union, to make sure that we mobilise talent from every Member State and facilitate access to the pilot lines and the design platform.
Finally, we will continue supporting the development of quantum technologies in Europe, particularly quantum chips, with a perspective of industrialisation.
[Ensuring security of supply]
The second pillar of our approach is building – in Europe – a resilient semi-conductor supply chain.
Our objective is clear: we want to turn Europe's technological lead into industrial leadership and resilience.
This is not about closing Europe or doing everything here in Europe.
It is about creating the right industrial capacities, such as mega fabs to produce the most advanced chips.
And about investing across the whole supply chain, from wafer production, front-end and back-end processing of chips, as well as design and equipment.
For this, the Chips Act creates an attractive investment framework. We adapted competition rules to allow higher intensity of State aid, to support both capex and opex. We made Europe competitive with other parts of the world by introducing a matching clause.
And it works! The Chips Act has already generated more than €100bn investment (private and public). We have launched a €21bn IPCEI around 68 industrial projects in 14 Member States. We have supported investment in mega fabs, paving already the way to more security of supply for Europe.
[International cooperation]
The third element of our strategy is to build strong and balanced international cooperation.
With the EU Chips Act, a common strategy for 27 Member States in semiconductors, we can now engage in relevant partnerships, because in the new geopolitics of supply chains, more cooperation is needed.
I strongly believe we can only build successful partnerships on mutual strengths, but certainly not to compensate weaknesses. A stronger, more resilient Europe in semiconductors is also a more credible partners for solid partnerships.
Our partnerships will be designed according to 3 parametres: reduction of dependencies, security of supply and preservation of our security interests.
To ensure our security of supply , we refuse any attempt of geographical segmentation where Europe would produce mature nodes, while advanced nodes are manufactured in Asia and the US.
The best guarantee we have on security of supply is our interdependencies, like we have in the equipment segment.
Thanks to the work of the European Semiconductor Board, which I welcome here as it held its first meeting this morning, we will keep a vigilant eye on our supply chains.
To preserve our security interests , we must adapt our approach. Everyone acknowledges now the interlink between industrial or technological might and security and defence interests: AI chips, supercomputers, high cyber-secured processors can all be used in military equipment and contribute to technological superiority.
As we showed recently when working with our partners such as the US and Japan regarding the export control of the most advanced technologies, Europe is determined to do whatever it takes to preserve our joint security and will act together with our allies in this endeavour. Europe will equally defend its industrial interests and leadership when they are at stake.
And in line with our Economic Security Strategy, we intend to promote, protect and partner in our mission to de-risk, maintain, and increase the Union's technological edge in critical sectors, including semiconductors.
Our strategy strikes the right balance between preserving our joint security and being ardent defenders of our industry's interests.
[Conclusion]
Ladies and gentlemen,
The European semiconductor industry is at a pivotal moment. The challenges we face require bold actions.
With the Chips Act we have put in place an ambitious plan to strengthen Europe's semiconductor ecosystem.
And today we are delivering on it.
We are launching the Industrial Alliance on Processors and Semiconductor technologies – a forum where industry can discuss the path towards our common targets. The members of the Alliance, from every sector of the semiconductor value chain, will identify strategic technology threats and opportunities, foster industry's commitment to develop skills, and serve as an important voice informing the work of the European Semiconductor Board.
I therefore count on you to get involved in this work.
We will work together – industry, Member States and the Commission – to put Europe at the forefront of the digital transition.
I wish you all a great Chips for Europe event.
