back to article EC president promises European Chips Act to quadruple homegrown production by 2030

The European Commission will introduce legislation next month designed to turn the continent into a center of chip expertise and manufacturing. The EC will propose the European Chips Act in early February, which will boost Europe's infrastructure for the production and supply chain of chip manufacturing, said Ursula von der …

  1. Anonymous Coward
    Anonymous Coward

    Sentiment is correct

    "Europe will always work to keep global markets open and connected. This is in the world's interest and it's in our own interest," von der Leyen said.

    What does Micron say though?

    1. Anonymous Coward
      Trollface

      Re: Sentiment is correct

      AC>> What does Micron say though?

      They are a US based memory products company. What has their view got to do with it?

  2. anonymous boring coward Silver badge

    Makes sense. It's not as if China is above state intervention. It's a matter of preparing fertile ground.

    And EU has the clout.

    1. codejunky Silver badge

      @anonymous boring coward

      "And EU has the clout."

      For what? I am not being facetious but this is manufacturing plants for cheap mass produced products of generally low value. Thats why its done in Asia where the labour is cheaper and input costs (such as electricity) are lower.

      Almost any country could have a manufacturing plant which is why people cared about value for money. To attract these developments the US and EU are both having to hand over a lot of money.

      Thats not a comment on how good the idea is only that I cant imagine it needs much clout.

      1. Anonymous Coward
        Anonymous Coward

        Re: @anonymous boring coward

        codejunky: " I am not being facetious but this is manufacturing plants for cheap mass produced products of generally low value."

        I don't think "ignorant of semiconductor manufacturing and the semiconductor market" is spelt "FACETIOUS".

      2. Anonymous Coward
        Anonymous Coward

        Re: @anonymous boring coward

        >>>cheap mass produced products of generally low value.

        A 300mm wafer (which is what fabs produce and sell) will run at around $10K-15K a piece on the latest nodes. Plus all the NRE cost for a set of masks. Not really a low value product.

        1. codejunky Silver badge

          Re: @anonymous boring coward

          @AC

          "Not really a low value product."

          The design costs may not be low value (thats the high value bit actually) but the producing of them is low value.

          "A 300mm wafer (which is what fabs produce and sell) will run at around $10K-15K a piece on the latest nodes"

          Ok so lets assume the higher figure you give of $15k. A 300mm wafer can have 600 chips per wafer making them worth around $25 a chip. $16 at the lower estimate. The idea of making bigger wafers seemingly the idea as increased mass production is the aim.

          Now move that from Asia to Europe or the US with higher wages, higher electricity costs, more regulation, etc. That $25 can easily skyrocket.

          1. Anonymous Coward
            Headmaster

            Re: @anonymous boring coward

            "A 300mm wafer can have 600 chips per wafer making them worth around $25 a chip." You are embarrassing yourself. Stop digging. You have totally misunderstood what fabs manufacture and what they sell. D-Minus.

            1. Justthefacts Silver badge

              Re: @anonymous boring coward

              I think you’re missing the point by being pedantic.

              The point being made is that the “cost drivers” are commodity race to the bottom. The main costs are those of cheap labour (the majority of fab employees are paid well below EU minimum wage legislation), vast quantities of chemical feedstock, and utilities like electricity and water.

              Plus, ironically, *high* margin, high tech capital expenditure equipment costs, like EUV steppers, bought from ASML where the profit *already* goes to the EU.

              Running a fab in the EU, in the context of global competition, will likely *lose* vast quantities of money. TSMC undercut you by at least x2 on their input costs of raw materials. They also undercut you by x1.5 on the cost of labour, unless you rewrite your minimum wage legislation, even if you site the fab in Poland…..and it’s x4 or worse if it’s in Dresden.

              And most of all…..if you think the EU Commission has the “clout” for such a capital intensive industry…..well, it does but the sacrifices you will have to make are insane. This is an industry with an *annual* capital investment of $30bn for equipment. And that’s projected to rise to over $70bn *annually* in the 2027 timeframe quoted. Handing over $10-20bn tax incentive over *6 years* to Intel, ie only $2-3bn annually just doesn’t touch the sides.

              As I say, the Commission *could* stump up the half a *trillion* capital investment needed……but that’s the entire budget for everything else it does! No more investment in social enterprise, no education, no infrastructure projects, no science R&D.

              I would advise you to look at the living conditions in Taiwan, and ask yourself if you really, really want to live like that. If you do, go right ahead!

              1. Anonymous Coward
                Anonymous Coward

                Re: @anonymous boring coward

                No more investment in social enterprise, no education, no infrastructure projects, no science R&D.

                You forgot "handouts to landowners"

              2. Anonymous Coward
                Anonymous Coward

                Re: @anonymous boring coward

                @Justthefacts

                Costs around the globe clearly do vary. As do governmental investment and strategies wrt technologies: Agreed.

                We could argue exactly the same thing about car and battery manufacture in the UK. And how it no longer makes sense to do that here any more.

                "I think you’re missing the point by being pedantic."

                If you want to call it that. It does drive me hog-wild when keyboard bashers start spouting nonsense about "chips". When they've not a clue as to how they are designed, manufactured and (not mentioned by us yet, but a big part of cost) tested. So sue me.

                The long of it is, this is an EU strategy/initiative. So of no concern to England/UK any more. And I predict a drop off in actual semiconductor design/implementation in the UK by circa 2030. (No new blood being brought in. So in 10 years the attrition through retirement will kill it off.)

                1. codejunky Silver badge
                  FAIL

                  Re: @anonymous boring coward

                  @AC

                  "If you want to call it that. It does drive me hog-wild when keyboard bashers start spouting nonsense"

                  So assuming your the same AC you were being a dick while not disagreeing with what I said. Ffs and people wonder why I generally assume AC's to be trolls. Noting that I mentioned the generally low value product that AC decided to be pedantic about wafers.

                  Which back to my original question to the actual commenter of does it really need clout to spaff money on the creation of manufacturing plants for cheap mass produced products of generally low value.

                  The single question is does that really require clout?

                  1. Anonymous Coward
                    Anonymous Coward

                    Re: @anonymous boring coward

                    codejunky "So assuming your the same AC you were being a dick while not disagreeing with what I said."

                    Clearly not happy about being pulled up on the inaccuracies and shortcomings in your musings. Sorry about that.

                    But how are $15K wafers low value? Understating that the fabs sell wafers, not chips is fundamental in understanding how the industry fits together. Then add on top the time spent on testers and packaging. (You could argue that this was a lower cost part of "chip production" value chain as packaging/test houses are scattered al around the globe.)

                    But all this is irrelevant, as England has no dog in this fight. And never will. So why would the English care about what the EU and its member do, or don't do.

                    1. Anonymous Coward
                      Anonymous Coward

                      Re: @anonymous boring coward

                      ^Understating that the fabs sell wafers ^Understanding that the fabs sell wafers

                      (Stoopid text correct!)

                    2. codejunky Silver badge

                      Re: @anonymous boring coward

                      @AC

                      "Clearly not happy about being pulled up on the inaccuracies and shortcomings in your musings. Sorry about that."

                      I dont care if you have to be pedantic for your own little sanity, I dont care. Its the stupidity of pretending your calling me out as wrong when the point is the cost of mass producing this stuff and you agree. Your crying is about wafers vs chips and your weird hang up of the words 'generally low value product' which you seem to translate to low value as in cheap for you.

                      "Understating that the fabs sell wafers, not chips is fundamental in understanding how the industry fits together"

                      Thats great if I wanted to get into the industry. As a consumer of products which integrate these items my caring is the increase in costs that would affect me. And the costs are why these things are done in Asia and it costs so much to bring them to expensive places like the US and EU (you dont seem to disagree).

                      "(You could argue that this was a lower cost part of "chip production" value chain as packaging/test houses are scattered al around the globe.)"

                      I never said producing them is cheap. Thats why the mass producing benefits greatly from cheap and plentiful labour, energy, materials, etc. Things which are more expensive in the US and EU.

                      "But all this is irrelevant, as England has no dog in this fight. And never will. So why would the English care about what the EU and its member do, or don't do."

                      To be honest I think it is of interest to the UK if the EU stump up a load of money to build fabs and chuck out more chips to market. Just as we should be interested that the US is doing so. Right now as supply was stalled and playing catch up we are seeing the rise in prices. With more brought to market there could hopefully be a glut or at least ample supply to bring the prices back down. Again as a consumer that is of interest to me.

      3. anonymous boring coward Silver badge

        Re: @anonymous boring coward

        “ cheap mass produced products of generally low value”

        Incorrect. Besides, the main value was in the integration of these into other products, such as cars. So strategically important.

        Spare me the long rants.

        1. codejunky Silver badge

          Re: @anonymous boring coward

          @anonymous boring coward

          "Besides, the main value was in the integration of these into other products, such as cars. So strategically important."

          Nothing wrong with that. I dont think I have said that is wrong.

          "Spare me the long rants."

          Didnt realise my post was too long for your reading comprehension but I asked you a simple question you seem to have missed. I asked does it really take clout when it seems to require throwing money at the manufacturers to subsidise production in an expensive country? No more no less.

  3. _LC_ Silver badge
    FAIL

    Beware of the tiny witch

    I can tell you how the promises of “Flinten-Uschi” (that's what she's called in Germany) worked out in the past: utter failure at quadrupled costs.

  4. steamnut

    It will fail

    The shortages of ICs which,for example, are hampering the car industries' ability to delivery new vehicles will not be solved with the EU's "grand design". It just will not work.

    Apart from the problems, and costs, of creating all documentation in the 24 official languages, there are too many vested interests at play. The French and Germans will want the lion's share of the action but the cheaper-labour members will want the GDP value too. And while they figth amongst themselves the world will move on.

    And that is assuming that the EU will ever come up with a single chip design that is good enough to rival the off the shelf options from Intel, AMD and ARM licensees. Right now the big players are already planning their next evolutions and expanded foundries while the EU does not have anything to offer now or even an empty foundry waiting for its first contract.

    Today's designers are not going to design-in an EU concept IC, they are going to select something already available. Waiting for the "new" EU chip would be suicide.

    This will be a repeat of the UK's Inmos saga but with even more money being wasted. After the beef and butter mountains, expect a chip mountain......

    1. Anonymous Coward
      Anonymous Coward

      Re: It will fail

      You are right. Because the EU doesn't do "chip design." (A bit like Arm in that respect.)

    2. Anonymous Coward
      Anonymous Coward

      Re: It will fail

      The problem is EU has had fabs .... ST had/has fabs - Crolles was state of the art and delveloped technology (65-30nm) alongside IBM and TSMC. Only problem was while they could do the process R&D there the fab wasn't biug enough to really support production at scale because while, I'm sure, the French governnent might have invested the money needeed for this, EU "level playing field" rules prevent this and they could only make it a size that could still be described as R&D.

      If the EU are getting behind funding then there will be battles between France, Germany and Italy etc over where the money should go + then the "bridges for Bulgaria" directive will ensure that a project will not get off the ground unless there's a site based on a Greek Island or something like that.

      BTW "24 languages" won't be an issue - all technical work in Europe is done in english unless everyone is from the same country (I've had the "embarssment" of being in meetings where everyone was talking in French or German until someone pointed out there was a "visitor from the UK" and they immediately switched to English)

  5. johnnyblaze

    Not gonna happen

    Well, unless the EU is prepared to offer years and years of eye-watering subsidies to attract chip makers to Europe, it ain't gonna happen. Literally everything about operating inside the EU is considerably more expensive, strangled with red-tape with unworkable labor laws.

    1. Yet Another Anonymous coward Silver badge

      Re: Not gonna happen

      So Greek taxpayers are going to give Billions to a US corporation to double its plant in Ireland while the Eu sues US corporation over its imaginative tax deals with Ireland

    2. anonymous boring coward Silver badge

      Re: Not gonna happen

      “ strangled with red-tape with unworkable labor laws”

      what rubbish.

  6. adam 40 Silver badge
    Facepalm

    So the EU are going to make silicon chips...

    ... only to send them to China to be soldered onto PCB's???

    Fuckwits.

    1. Yet Another Anonymous coward Silver badge

      Re: So the EU are going to make silicon chips...

      Yes I believe those dumb euro commies Intel do this from Eire

  7. DS999 Silver badge

    The industry is more than just fabs

    The EU already houses THE most important company in the world for leading edge chip production, ASML. Make sure you take good care of them, and don't give them any reason to build facilities overseas where IP theft could occur - because you know that stealing from ASML the ability to build EUV scanners is near the top of the list for IP China wants to steal.

    There is also packaging which is becoming more and more complex as 3D stacking technologies proliferate and isn't the relatively low tech low cost labor stepchild of the chip industry it used to be.

    So I don't think it is really necessary for the EU to be self sufficient as far as actually fabbing leading edge chips as you still have the sole source for EUV scanners all three of the companies left standing making leading edge chips absolutely depend on. You have TSMC, Intel and Samsung by the balls already.

  8. IGotOut Silver badge

    What?

    "with shipping and fuel adding to the cost of semiconductors"

    You are talking a few pence per chip if buying in bulk. A rounding off mot even worth considering when compared to the EU's higher cost base.

  9. ITMA Bronze badge
    Joke

    Hmmmm

    Is it me or does the positioning of the mic and the blue background make her look like some Pythonesque cartoon cutout?

    Or is Ursula really a cardboard cutout? LOL

    1. anonymous boring coward Silver badge

      Re: Hmmmm

      It’s just you. Or, maybe, the booze.

      1. ITMA Bronze badge

        Re: Hmmmm

        The booze I've drunk or the booze she has?

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