A group of 17 European Union member nations recently declared they would work together to bolster the region’s semiconductor resources. The consortium wants to strengthen the area’s chip design and production ecosystem. The alliance called on the trade bloc, its individual counties, and the private sector to financially support the initiative.
At present, Austria, Belgian, Croatia, Cyprus, Estonia, France, Finland, Germany, Greece, Italy, Malta, the Netherlands, Portugal, Romania, Spain, Slovakia, and Slovenia have declared their support for the electronic components project.
‘A European Initiative on Processors and Semiconductor Technologies’
The 17 EU members outlined their chip and embedded systems development initiative in a public statement titled “A European Initiative on Processors and Semiconductor Technologies.”
The group noted Europe is home to several firms that are driving the development of radiofrequency (RF) components, microcontrollers, and semiconductor fabrication equipment. The alliance also mentioned the region’s key role in deploying 5G networks and cultivating 6G technology. However, despite being an innovation hub, the area only represents 10 percent of the €440 billion ($533 billion) global semiconductor market.
The EU countries intend to pool their resources to establish a dominant position within the sector.
The alliance specifically mentioned the desire to expand the area’s processor, datacom, and computing semiconductor design and fabrication capabilities. The group also named creating a 2nm manufacturing node as an important goal for the project. The declaration’s signatories stressed having a robust components ecosystem is essential to Europe’s “technological sovereignty and competitiveness.”
Because the EU semiconductor initiative is still in its early stages, its first announcement is relatively light on details. But the statement did mention using funds from the European Recovery and Resilience Facility—a €672.5 billion COVID-19 rebound package—to financially support the project. It also listed 2025 as a date by which some of its electronic components development plans should be realized.
Why the EU is Prioritizing Regional Semiconductor Ecosystem Development
The EU’s decision to prioritize chip development makes sense as semiconductors are the foundation of digital transformation and technological advancement. The trade bloc also understands how a thriving electronic components ecosystem can cultivate strong economic activity. While the group’s declaration does not spell out why the initiative is being launched now, a few recent events likely sparked its launch.
First, the U.S.-China trade war has prompted widespread disruption within the global semiconductor sector. As the two superpowers have exchanged tariffs and export controls, the business of buying, selling, and shipping electronic components has become increasingly volatile. By creating a European Union chip value chain, the organization’s members could avoid the conflict’s headwinds.
Second, the coronavirus pandemic highlighted the weaknesses of the established global supply chain. This year, multiple regions initiated hard lockdowns to slow the spread of COVID-19, which negatively affected manufacturing and logistics. However, if the EU has its own cutting-edge components industry, it could better handle another worldwide disruption event.
Third, China, India, South Korea, Taiwan, the United States, and other nations have recently launched national initiatives to bolster their national semiconductor independence. Those countries are spending billions to support their local chip sectors in hopes of reaping trillions in financial returns. The EU is aware of this development and is keen to keep pace with the rest of the world.
Given the European semiconductor initiative’s aggressive timetable, it will be interesting to see how the global community responds, and what groundbreaking innovations will come out of the region’s push for greater technological advancement.