Europe vows it won't let US and Asia treat it as a source of museum-grade chip tech

Europe is not throwing billions at its semiconductor industry to end up as a source of important-but-dull silicon, EU Commissioner Thierry Breton said during his keynote at the Interuniversity Microelectronics Centre's annual forum in Antwerp, Belgium, this week. "We are refusing any attempt of geographical segmentation where …

[Justthefacts]

I want the SHiNY Thing

I want the shiny toy said the tantruming child. I want PowerPoint slides showing the Commission is the bestest there ever was. And it must be a really big factory with a massive marble entrance hall, with space for a 1000 meter high statue of ME.

Never mind what makes commercial sense, or what would actually help industry.

[localzuk]

Re: I want the SHiNY Thing

It isn't just about helping the current industry. It is about developing new industry and leading in the space. If taxpayers money is being invested, they want to make sure it is just that, an investment.

[Justthefacts]

Re: I want the SHiNY Thing

It isn’t an “investment”, that I can assure you of. It won’t, of course, produce any return on investment, rather a massive loss. Possibly in the end, “Berlin Wall falling” levels of loss. That’s what happened last time in GDR in Jena in literally the same factories under the discussion. As to “developing new industry”, no it won’t.

“Leading in the space” is exactly what I accused him of. Building a marble foyer. Let me know when, or where, “leading in the space” has ever paid anybodys salary. It doesn’t, it’s self-promotion marketing bollocks. It’s the industrial-aristocracy equivalent of an influencer calling out that they’ve reached a million views on TikTok. That’s all.

Good tech doesn’t “need government investment”. It hopefully spools out cash fast enough to pay for its own growth, and if not there are queues of actual private investors wanting to buy a slice of the cake. Therefore, by definition, government “investment” is just throwing money into the ground. This is 100% opposite to the correct role of government, which is to *provide services for people who need it*. Nurses, teachers, social workers, care homes. Every euro you spend on silicon fabs, is an elderly confused person sitting in their own urine. I don’t know how you guys can live with yourselves for the shame.

[localzuk]

Re: I want the SHiNY Thing

You are missing a rather huge point here. One of the critical aspects of the world economy today is easy access to advanced technologies. We had a pandemic and one country shutting its factories caused the world economy to crash. Even when other countries were recovering, one country making a different decision has led to huge issues.

That advanced tech is now basically a strategic asset. Just like steel factories are. Just like shipyards are.

So, the West has realised that having literally all its eggs in one basket (basically, most of the world's advanced fab capacity is in Taiwan), is a huge strategic risk.

Therefore, there needs to be an incentive to get companies, who are happy to continue using Taiwan as their manufacturer, to set up some fabs over here as well.

It isn't just a cost thing either - the average earnings in Taiwan, and average GDP per person are very similar to the UK, for example, its simply about the capital cost of setting this stuff up. Once its running, it'll keep on running, with periodic profit driven investment to modernise as new tech comes along. But to get started, they need a push.

Governments are there to ensure countries are protected, both militarily and economically.

[OhForF']

Re: I want the SHiNY Thing

I do not understand why the EU is not making rules that say if you want to be an approved supplier of pharma products to the european market you have to produce at least 5% of the volume you sell in the european market in EU contries with a realistic plan to ramp up that production to 15% in a month and 50% in half a year.

Currently we have a big problem if the supply lines to China and India are closed down and medial supplies are probably a more immediate concern than cutting edge chip fab's.

[codejunky]

Re: I want the SHiNY Thing

@OhForF'

"I do not understand why the EU is not making rules that say if you want to be an approved supplier of pharma products to the european market you have to produce at least 5% of the volume you sell in the european market in EU contries with a realistic plan to ramp up that production to 15% in a month and 50% in half a year."

Probably because the direct and immediate problems for the population being unable to access mediation would cause politicians to be strung up from lampposts all over Europe

[OhForF']

Re: I want the SHiNY Thing

Immeadiate problem? Of course this is not something that can be done on short notice and the lead time before enforcing that rule would have to be long.

Add a rule that any pharma company not handing in plans for building the eu factories within a realistic time limit looses the patent protection allowing anyone to build the factory and produce the formerly protected products and i doubt any of the big pharma companies will give up the profitable european market.

The real problem implementing something like this is not that it is impossible to do but the amount of lobbying money the pharma companies can affort.

[codejunky]

Re: I want the SHiNY Thing

@OhForF'

"Add a rule that any pharma company not handing in plans for building the eu factories within a realistic time limit looses the patent protection allowing anyone to build the factory and produce the formerly protected products and i doubt any of the big pharma companies will give up the profitable european market."

That would just lead to the US and probably everyone invalidating EU patents and a free for all on EU intellectual property.

[localzuk]

Re: I want the SHiNY Thing

I think there's some WTO rules involved as well. There's going to be repercussions to imposing such rules.

[Anonymous Coward]

Re: I want the SHiNY Thing

We had a pandemic and one country shutting its factories caused the world economy to crash.

But that wasn't due to being shutoff from the highest end products, it was from from being shut off from everything starting at nuts and bolts upwards - up to but not including the highest end products.

[Dasreg]

Re: I want the SHiNY Thing

This is all happening because the large developing country who was welcomed into the WTO had started to act like a belligerent. They cannot be allowed to continue their stealing, bullying and coercion, and they will not be allowed to benefit from the shared fruits of expensive R&D paid for by members of free countries. Let's see about their market access

[jmch]

Re: I want the SHiNY Thing

"Never mind what makes commercial sense, or what would actually help industry."

The whole point of governments giving subsidies is to get work done that is in their perceived strategic interest even if it does *NOT* make commercial sense. If it made commercial sense for foundries to set up advanced manufacturing plants in Europe, they would be doing it already. Europe (and the west generally) has to come to terms with the fact that the days of having their cake and eating it (ie an abundance of high-paying jobs combined with super-cheap imports and foreign travel) are gone. Labour costs in 'the west' are far higher than elsewhere because the standard of living is higher than anywhere else.

If and when other countries catch up to Europe's standard of living (which one can approximate, though not completely, with GDP per capita), it will be clear that Europe would lose a lot of it's relevance, because the populations of countries in S. America, Africa and Asia are far bigger. And that's OK, as long as there is a good balance between self-sufficiency and interdependence with other nations.

[Justthefacts]

Re: I want the SHiNY Thing

“If it made commercial sense for foundries to set up advanced manufacturing plants in Europe, they would be doing it already.” Exactly.

“The whole point of governments giving subsidies is to get work done that is in their perceived strategic interest”. Perceive away.

“Europe’s standard of living”. You’re living in the past of two decades ago. Median EU *country* GDP per capita is only slightly above world averages. Hungary is below Malaysia. Croatia is below Kazakstan. Finland is now the same as Guyana. What you’re imagining is West Germany, extrapolated to the other 300 million, but it ain’t so.

The only EU countries in the top ten GDP per capita are: Ireland, Luxembourg and Norway. And if you’ve ever been to Norway, you’ll realise that while they are comfortably off, they definitely aren’t rich: like Alaska, everything just costs 3x there. The only really rich country in the EU is Luxembourg, and that’s because it is a parasite.

[jmch]

Re: I want the SHiNY Thing

"The only EU countries in the top ten GDP per capita are: Ireland, Luxembourg and Norway." - I guess that last should be Denmark - Norway isn't in the EU!! But I guess it's fair to note that Norway, Switzerland and Iceland are all also in the top 10 while being non-EU European countries, and yes cost of living in all 3 is quite higher than even the richer EU countries.

"You’re living in the past of two decades ago. Median EU *country* GDP per capita is only slightly above world averages"

Looking at the EU, the poorest country in GDP/capita, Bulgaria is #60 in the world, meaning EU + other European countries occupy 33 of the top 60 places (and doesn't even include super-rich microstates like Monaco or Lichtenstein). The other countries high up the list are either the other western / far eastern democracies (US, Canada, Australia, New Zealand, Japan, S. Korea, Singapore, Taiwan), or else gulf sates or small resource-rich countries (Qatar, UAE. Saudi, Brunei, Bahrain, Oman) where a lot of the wealth is concentrated in fewer hands at the top. Meaning, if you look at the median income instead of per capita, European states are even richer than the rest of the world.

In fact median income is a bit more complex to calculate but even when factoring purchasing power (ie that cost of living is far lower in poorer countries), the world median is estimated at just below $10k, while EU average is almost double that at $18k. The Median income by country list is mising a few entries, and notably has median missing from India and China, but on this one the lowest EU country is Romania at #53, and 33 of top 53 are European.

It's probably right that the rest of the world is catching up with respect to 20 years ago, but Europe is still very rich compared to most of everywhere else

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

https://worldpopulationreview.com/country-rankings/median-income-by-country

[Justthefacts]

Re: I want the SHiNY Thing

“meaning EU + other European countries occupy….33 out of top 60”.

It’s very apparent that many of the wealthiest in that set of 33 “European” are preferentially *not* members of the EU. The actual set of 27 EU countries skews to bottom of your arbitrary 60: 12 in top half, 25 in bottom half. But “top 60” is arbitrary anyway: tChina, Argentina, Malaysia, Mexico all occupy positions 60-70, have huge populations, and are running up the chart by a couple of places per year.

The Myth is of an EU with West German standard of living, multiplied by 400 million inhabitants. But it’s very not true. To see the magnitude of that cognitive bias (halo effect), look at median GDP per capita of Eastern Europe alone. It’s $8800, which is about *30% below* global median $12800. The GDP per capita figure is going to shock you, probably you won’t believe it at first.

https://www.nationmaster.com/country-info/groups/Eastern-Europe

The reality is that the median *income* is higher there. But those countries can’t reality *produce* very much, because they are too expensive, nailed by the exchange rate of the euro. Hence all their income is just EU transfer subsidy. And they are forced to buy EU goods (German goods) as a quid pro quo, by the internal market protections, so it’s really just income for German industry disguised as aid for Eastern Europe subsistence peasants, which is what they have been made into. Budapest used to be one of the glorious wonders of the world, on a par with Rome, now it’s smashed into bits with grinding poverty.

You are right the oil-rich states will probably disappear from the rankings in a generation. But the rankings are equally distorted by considering tiny countries like Malta, Finland, Belgium etc as independents. And by 2050, all of: Taiwan, Korea, Australia, New Zealand, Turkey, Chile, will be well above all except maybe two EU countries. And you’re ignoring the Caribbean countries, which are doing just fine thank you. Plus countries like Nigeria, Malaysia, Mexico, Brazil, Thailand, Peru, South Africa, Philippines, will all be sitting comfortably more well-off than the Spain/Italy band.

[M.V. Lipvig]

Re: I want the SHiNY Thing

"The Myth is of an EU with West German standard of living, multiplied by 400 million inhabitants. But it’s very not true."

Absolute truth. I lived in West Germany in the early 1990s and it was a wealthy nation then. People lived in nice houses, drove great cars, dressed well and ate well. In 2018 we visited our daughter and her husband, stationed in the same area we lived in. We went right before the pandemic hit and were absolutely shocked at how bad it was. Gone were the big nice Mercs and BMs, as all I saw on the roads was rusted out junk econoboxes with a very occasional nice car. The restaurants were priced high as expected, but the food was terrible compared to what it was. Think 4 star pricing, fast food quality. The people were dressed bargain basement instead of nice clothes. When we lived there onpost housing was amazing, better than similar stateside, but the people on the economy lived in nice houses that made onpost look drab and depressing. Onpost housing today is not really any different, but houses offpost looked shabby and poorly maintained. The whole area looks as though they went from being wealthy with plenty of discretionary funds to people who are barely making their basic food and shelter bills.

This is not a matter of looking back on the past with rosey filters either. I remember the bad as well as the good from the 90s. Quite frankly I expected it to be even nicer now than it was, and was really looking forward to being back again. The wife and I were also looking forward to making more trips over as we wanted to visit some nations we weren't able to while raising a couple of kids on a Private's pay. After that trip though, we will probably never go back over again. I mean, why drop 8-10 grand on plane tickets and another 5-10 grand on hotels to visit a near 3rd world nation? Germany united is not nearly as nice a place as West Germany was. Depressing, really. May as well stay home. The American midwest is way nicer than Europe these days.

If I can convince the wife to risk being near dinner plate sized spiders and walking under dropbears, we might try Australia next.

[jmch]

Re: I want the SHiNY Thing

"The Myth is of an EU with West German standard of living, multiplied by 400 million inhabitants. But it’s very not true. "

I guess that that is the ideal target for the EU, rather than the myth - There is no doubt that West Germany took a big economic hit to accommodate East Germany. One of the big issues with the EU is in fact how much funding the richer western EU nations are willing to devote to the further economic development of the Eastern / Southern ones, particularly with Ukraine and Moldova being fast-tracked for future membership. That's essentially a political decision of solidarity across allied nations.

With regards to the stats, I find the stats on your link interesting, but difficult to properly interpret since (a) it's "Average GDP per capita" is an average of the averages, not the bloc average, and (b) it bunches together in 'Eastern Europe' some EU members, some prospective EU members, and also Russia and a couple more ex-Soviet republics. From the same site, the avg GDP for the whole EU is $32k, far above the world average even with the poor numbers from the Eastern countries dragging the average down. Looking at Europe as a whole the average GDP is still $25k, double the World average.

"those countries can’t reality *produce* very much, because they are too expensive, nailed by the exchange rate of the euro"

The only 'Eastern' European countries in the Euro (with GDP per capita) are Slovakia ($16k), Slovenia ($22k) and Croatia ($13k, only joined Euro this year), and even so the only reason they get lumped as 'Eastern' is historical rather than geographical. The economic problems in Eastern Europe have nothing to do with the Euro

"Budapest used to be one of the glorious wonders of the world, on a par with Rome, now it’s smashed into bits with grinding poverty."

I can't really tell... maybe it was a glorious wonder in the 1950s before the soviets moved in??? In any case Hungary's GDP has grown by 4X (2X when inflation-adjusted) since 1990

There is no doubt that the standard of living of the middle class in Western Europe has stagnated in the last 20 years, nor that there is a big disparity between regions in Europe (richest EU member is a bit over 4X GDPpC than poorest, compared to a bit over 2X between richest/poorest states in USA *excluding Luxembourg and District of Columbia which are tiny wild outliers*).

There is equally no doubt that most of Europe is still both technologically advanced and extremely wealthy compared to most of the rest of the world.

[Doctor Syntax]

Re: I want the SHiNY Thing

" in their perceived strategic interest even if it does *NOT* make commercial sense"

The strategic interest might lie in improving supply chains for the bog-standard parts that other industries need.

[Andy 73]

ASML

ASML gets brought up to prove Europe still has a semiconductor industry, the same way Britain brings up ARM to prove we still have a semiconductor industry,

[Captain Scarlet]

Re: ASML

Weird being a Brit my impression of ARM was used to show there are smart people here.

Not seen anything to suggest we physically make anything here, just license the smarts and let somewhere cheaper do the phsyical stuff (Unless I have been completly blind and missed something, which is actually very possible. Feel free to correct me if I am wrong).

[Andy The Hat]

El Reg units?

"20 angstrom and smaller process tech. That's roughly equivalent to 2nm."

Given the definition of an Angstrom is in meters and 10^-10m (0.1nm), exactly how "roughly equivalent" are 20 Angstroms and 2nm ... roughly of course ...?

I believe it's "roughly equivalent" to 1/250000 the width of a pubic hair ... (your mileage may vary, compute an average measurement from a variety of sources, don't take samples at work, wash the micrometer afterwards.)

[LogicGate]

Re: El Reg units?

Keep in mind that, like with condoms, the British negotiators will insist that their pubic hairs are "girthier", and that the standard measurements can therefore not apply :)

[OhForF']

Re: El Reg units?

The way i interpreted the "roughly" was that what Intel calls 20 Angstroms should be 2nm but the tech node may be closer to what competitors call 5nm.

[StrangerHereMyself]

Infeasible

What Breton is asking is infeasible since Europe doesn't have any advanced fab companies and is therefore reliant on the goodwill of U.S. and Asian fabs willing to set up shop over here. And Taiwan has already mentioned it will keep its most advanced nodes to itself, as it sees this as a kind of "insurance policy" against a Chinese invasion.

The European Commission can write all kinds or rules and plans but in the end it doesn't have the leverage to prod TSMC or Intel to produce their smallest nodes in Europe.

[Roland6]

Re: Infeasible

> The European Commission can write all kinds or rules and plans but in the end it doesn't have the leverage to prod TSMC or Intel to produce their smallest nodes in Europe.

However, recent history shows us - get the right idiot in the White House and businesses will be rushing to use alternative facilities. Obviously, it seems it is only a matter of time before China emulates Putin and invites itself into Taiwan.

[Arthur Daily]

Import Substitution

Getting business working was solved in 1911. It is called import substitution, and a stiff tariff on goods with no local content, or no local approved offset activity. See India, or China before the rush there happened. In 2023 this would be awkward, because cost breakdowns would need to be provided - that that would expose tax evasion. EU will remain a backwater, because only a stick waving will induce change it not visible - nor tax haven attacks. Same for those other search engine monopolies. Only France is getting uppity. As for Taiwan, it is not about GDP per head - it is about cost per chip factory employee, and insurance that if one leaves, there are others. Value for Money, Taiwan and China lead the pack, plus they have a scalability advantage, and no strikes all year round production.

[M.V. Lipvig]

Don't feel bad, Europe

The world needs menial laborers as much as it needs high tech.