EU preps Chips Act 2.0 to strengthen semiconductor industry after original program reportedly flopped
If at first you don't succeed, you can dust it off and try again.
A group of European countries led by the Netherlands is setting the groundwork for the European Chips Act 2.0 after the original one failed to achieve its goal of strengthening the European semiconductor industry, reports Reuters.
The group aims to deliver concrete proposals by summer to work closely with the European Commission. The politicians indicated their work after producers of chips and chipmaking tools asked the EC to launch a follow-up for the 2023 Chips Act.
The group includes nine European Union members led by the Netherlands, including France, Germany, Italy, and Spain, which already have semiconductor industries (except Spain, which is more focused on R&D activities). Dutch Economy Minister Dirk Beljaarts explained that this group is preparing for a potential second funding package for the semiconductor industry, including both small and medium-sized companies.
"We need to allocate funds," Beljaarts told Reuters. "Both private and public funds to push the sector, also to make sure that the trickle-down effect takes place and that (small and medium-size) companies also benefit."
The 2023 Chips Act program, which is currently under review, failed to achieve any significant targets as it required the EC to approve projects funded by member countries and the EC (yet most of the projects were funded solely by member countries). The approval processes required by the EC, member countries, and local authorities were too slow for the rapidly developing semiconductor industry.
As a result, Intel and Wolfspeed postponed building major production facilities in Europe since economic situations changed while awaiting their approvals. According to Beljaarts, the intention this time is to be more selective and strategic in funding decisions.
Europe is strong in areas like research and development as well as chipmaking tools (ASML, ASM International, Carl Zeiss SMT, SUSS MicroTec, etc.). However, only Intel makes chips using advanced process technology in Ireland. Other European chipmakers use trailing nodes.
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Because of interest in selling their most advanced tools and government funding, makers of semiconductor production equipment have called the EC to launch the second round of funding.
After a gathering in Brussels with European lawmakers, ESIA and SEMI Europe (organizations uniting producers of chips and chipmaking equipment) said they would formally address their proposal to Henna Virkkunen, the EC's digital official. SEMI stated the need for direct backing in several areas beyond fabs, including 'semiconductor design and manufacturing, R&D, materials and equipment.'
More than a dozen companies joined the meeting. Among them were chip manufacturers Bosch, Infineon, NXP, and STMicroelectronics, as well as equipment suppliers ASML, ASM, Zeiss, and Air Liquide.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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Pierce2623 If labor costs make chip foundries left efficient in the US than Asia, it doesn’t seem like Europe with even higher labor costs has much chance of getting major fabs.Reply -
ejolson Reply
Could the cost of labour be less a problem than the skill level and work ethic?Pierce2623 said:If labor costs make chip foundries left efficient in the US than Asia, it doesn’t seem like Europe with even higher labor costs has much chance of getting major fabs. -
Elusive Ruse Reply
Skill and work ethics are much higher than Asia, the advantage of Asian countries is their lack of adequate protections for employees which enables the employers to pay their staff less offer fewer benefits while forcing them to work longer hours.ejolson said:Could the cost of labour be less a problem than the skill level and work ethic? -
George³ Well, at the EU level, the budget is mainly made to steal money, so it is normal for projects to fail. The same is true of the green policy budget, which was huge and therefore still provided some benefits, but not as much as expected.Reply -
Captnimo LOLS did they seriously just use the failed scheme of “trickle down economics” to justify this failed money grab?? For tech to be successful isn’t some equity bologna; it’s a nationalized singular entity. Otherwise costs become so great you can’t compete with other countries that have already beaten them to production, especially after western countries have already bulked up those third world countries through out sourcing. You’re literally just wasting money otherwise while lining a few ceos pockets.Reply -
RedBear87 ReplyIf at first you don't succeed, you can dust it off and try again.
And the definition of insanity is doing the same thing yet expecting different results. But no one at Bruessels ever got the memo... -
Markynd ReplyThe approval processes required by the EC, member countries, and local authorities were too slow for the rapidly developing semiconductor industry
No surprises here. The EU is the leading expert on bureaucracy after all. -
thestryker Assuming they actually analyzed what went wrong the first go around and have a plan for fixing that this could work out. Without that though it's destined for failure.Reply
I think what that official was referring to regarding "trickle down" is the smaller businesses required to keep fabs running. This was one of the big benefits Ohio was going to get from Intel's fabs there, but I don't know how much the delays have hurt there. Ohio doesn't have many of the support industries already so a big player moving in and bringing them can potentially lead to other growth. This is part of why TSMC chose AZ to expand within the US as the support infrastructure already existed. -
watzupken You can throw money at a problem, but if you cannot resolve fundamental issues in the region, then whatever efforts is as good as wasting taxpayers' money. In my opinion, fundamental issues includes,Reply
1. High power cost - Sure you can give money to attract companies to setup foundries there, but being a very power hungry business, it will not be competitive. It also limits taxpayers to pay more for what is essentially the same when manufactured in Taiwan.
2. High cost of labor - There is no hiding that labor unions are strong in the region and most companies tend not to hire too many labors there. So while you can hire there, maintaining and reducing headcount can be a massive challenge. I am not in favor when companies have to cut headcount as this means people losing their jobs. However, corporations exists only to make money and this includes managing cost, so headcount cuts will be expected.