The outgoing cabinet plans to allocate hundreds of millions of euros for innovations from Dutch chip companies. The plans for this are in preparation and are being submitted by ASML, VDL, NXP and PhotonDelta, among others.
It concerns money that falls under the flag of IPCEI (Important Projects of Common European Interest). This European program gives Member States more freedom to provide state aid to sectors that are of strategic importance for the entire EU. Such a construction is also used for the development of hydrogen as a clean fuel and batteries for electric vehicles.
The European semiconductor industry needs a boost in order not to lag behind the industrial policy of the United States and China. Europe wants to be less dependent on Asia – when it comes to chip production – and on the US – when it comes to cloud infrastructure.
Emerging technology, such as photonic chips, must also be able to compete with similar initiatives being developed elsewhere in the world. For example, PhotonDelta would like to expand the existing Smart Photonics factory.
It is not yet clear how much subsidy money the cabinet will ultimately channel to the chip sector. Insiders confirm a message in The Telegraph that it will initially be EUR 300 million – later on it could become more. Other countries seem to spend more; France and Germany would each like to free up 1 to 2 billion euros for the chip sector.
Not all ambitions can be achieved with a few hundred million euros. It makes sense to select a few promising projects to prevent the subsidy amount from becoming fragmented.
The high-tech sector is working on a joint plan in which ASML, the chip machine manufacturer from Veldhoven, plays a coordinating role. ASML is the market leader in lithography, the machines needed to make the most advanced chips.
All projects must also be approved by the European competition authority. But in the EU, partly due to the persistent chip shortage, the penny has fallen that the semiconductor sector is crucial for future economic growth and prosperity.
The Chips Act should prevent member states from troubling each other with national subsidies
After a previously created Chip Alliance, Ursula von der Leyen, president of the European Commission, announced a new initiative this week: the Chips Act. It is a law that aims to stimulate chip production in Europe. With ST Microelectronics (France), NXP, (Netherlands) Infineon and GlobalFoundries (both in Germany), the EU has its own chipmakers. But these together account for less than 10 percent of global chip production. The ambition is to grow to 20 percent.
This requires money and direction. The Chips Act is intended to prevent member states from interfering with each other with national subsidies. Thierry Breton, European Commissioner for the Internal Market, has also pinned his hopes on European research centers such as CEA-Leti, Frauenhofer and imec (in Leuven, Belgium). Imec in particular plays a strategic role in technology leaps in chip manufacturing.
The factories that make the most advanced chips are mainly located in Asia. The EU would like to be able to handle this production itself and not be dependent on, for example, the (shaky) political situation in Taiwan, where market leader TSMC operates.
The fastest way to achieve that goal is to interest one of the three major chip manufacturers (TSMC, Samsung and Intel) to expand into the EU. Intel is interested in building a state-of-the-art factory in Europe – a so-called foundry, where other chip designers can also have their products built. But Intel is asking billions in support for such a very expensive factory.
At the same time, a lobby is underway to help European chipmakers innovate and let them produce the most advanced chips themselves. But the technological lag compared to the Big Three seems too great for that.
Also read: E10-11 report imec
Extra support for the Dutch chip sector
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