Europe is forging a chip alliance

Industry Commissioner Breton wants to bring state-of-the-art chip factories to the EU. Not only does the future of the automotive industry depend on it.

Europe wants more: The new factories should be even larger and more modern than, for example, the semiconductor production at Globalfoundries in Dresden.

THierry Breton is setting the pace to bring Europe back to the front in the chip industry. At the end of this week, the EU Industry Commissioner will speak to representatives of leading semiconductor companies from America and Asia to explore the possibility of attracting billions in investments. He wants to set in motion the construction of new factories for the production of the most modern chip generations in the EU and thus close technological gaps to the competition overseas.

In this way, the Commission wants to ensure that enough chips for connected driving, Industry 4.0, smartphones, artificial intelligence and supercomputers will be manufactured in the EU in the future. “The shortage of chips, which the auto industry is currently suffering from, shows how urgently we need to make our supply chains resilient,” said Breton in an interview with the FAZ

“Europe is not naive”

His main focus is on the production of chips with structures that are thousands of times finer than a human hair. These so-called 5-, 3- and 2-nanometer chips are currently only manufactured by Asians and Americans. Breton wants to change that. “We want to build European capacity to design and manufacture the most powerful and energy efficient processors,” he says. “For this we want to bring the industry and the states together within the framework of the European semiconductor alliance in order to initiate the necessary investments.”

The model is the European Battery Alliance, in which numerous companies have come together to build the entire value chain in the EU with state aid. Ultimately, however, it cannot do without the participation of international companies such as Tesla or the Chinese companies CATL and Svolt. For chip production, Intel, but also TSMC and Samsung come into play, according to the European Commission.

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Breton’s agenda on Friday includes a meeting in Brussels with the CEO of the American industry leader, Intel, Pat Gelsinger. On the same day, according to information from the FAZ, he will speak by video conference with a high-ranking representative of the Taiwanese company TSMC, number three in the industry and the largest contract manufacturer for microchips in the world. In addition, a discussion with the Korean Samsung Group, the second largest chip manufacturer in the world, is apparently also planned.

Breton has no problem getting Asian and American companies on board as long as he can define the terms. “Europe is not naive,” he says. “But we don’t want to isolate ourselves either.” The EU will build bridges to international partners, “but with us in the driver’s seat,” emphasizes the Frenchman. The meeting with Gelsinger and the representative of TSMC should also send out this message. A week later, it’s the turn of the Europeans. Then Breton speaks to the heads of the European semiconductor manufacturer NXP and the Dutch factory equipment supplier ASML, Kurt Sievers and Peter Wennink.