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—Part of this EE Times series: A Vulnerable U.S. Electronics Supply Chain.
Other articles in the series include: Experts: U.S. Military Chip Supply Is Dangerously Low, Reshoring Chip Industry Risks Failure With Just More Fabs, U.S. Crawls Toward Rebuilding Frail PCB Industry, USA Rare Earth Aims to Break China’s Grip and GF, Lockheed Martin Pair Up to Improve National Security.
ANTWERP, Belgium—Government leaders from the U.S., the E.U. and Japan who have championed stimulus legislation aimed at nearly doubling their own shares of the global chip market—and who gathered here last month for a summit called ITF World—pledged cooperation to avoid competition that would be harmful to the development of the semiconductor industry. The effort is aimed at revamping the global supply chain to reduce reliance on China, which the partners see as a strategic adversary.
The government leaders recognize that the incentives they are providing through multi-billion-dollar stimulus measures generally known as CHIPS Acts have the potential to lead to overcapacity in various parts of the global supply chain, hurting profitability and innovation.
“We don’t want to accelerate a CHIPS competition globally,” U.S. National Institute of Standards and Technology (NIST) Director Laurie Locasio said at a forum here held by imec, one of the world’s largest research centers for semiconductor technology. “We would love to be able to together accelerate the entire technology.”
Collaboration opportunities will become clearer later this year when the U.S. establishes its National Semiconductor Technology Center (NSTC), Locasio said. The NSTC will be a place where innovators partner with universities, governments, and multinational companies to develop new technology and spin out companies, she added.
With cooperation just beginning, the first effort should be understanding supply chains today and their vulnerabilities, Thomas Skordas, deputy director-general at the European Commission, said in a panel discussion with Locasio and Satoshi Nohara, director general of Japan’s Ministry of Economy, Trade and Industry (METI). The three oversee chips-industry-boosting stimulus acts in the E.U., the U.S. and Japan.
To be sure, China is also out to expand chip production capacity.
“Everyone needs to adapt to the new geopolitical realities where current dependencies within a given supply chain can be used as leverage against one’s own interest,” Thierry Breton, a European commissioner, said at the imec event. “Our partners—notably the U.S., [South] Korea, Japan—but also our systemic rivals, China, are investing heavily to support supply chain capacity.”
$500 billion-plus targeting capacity expansion
The global industry is investing more than $500 billion in new fab projects to meet demand, according to chip-industry association SEMI.
Europe aims to double its 10% share of the global chip market by 2030, according to Breton. Japan expects its share to triple during the same period. The U.S. has not said how much its $52 billion CHIPS Act is expected to grow market share from the 10% it currently has.
Japan wants to avoid past mistakes and expects to work more closely with international partners, according to METI’s Nohara.
“We are taking an approach of enhancing open innovation,” he said. “In the past, Japanese industrial policy focused mainly on Japanese national vendors. Most of them could not survive and, as a result, lost invested taxpayers’ money.”
Nohara said he hopes to avoid repeating the history of defunct semiconductor companies Elpida and Trecenti, which received support from the Japanese government.
“This time, we are taking an open innovation approach with like-minded partners—based on the combination of our strengths and partners’ strengths,” he said.
Imec CEO Luc Van den hove explained the significance of the opportunity at hand for the three governments’ investments.
“The ‘CHIPS Acts’ need to be done in the right way,” he said. “Each region clearly has strengths. Some regions are stronger on leading-edge manufacturing like East Asia, others in mature nodes like Europe. The U.S. has strengths in equipment and EDA tools, as well as materials and R&D pilot lines. If the ‘CHIPS Acts’ were set up such that each region would try to do it all, try to become fully self-sufficient, it would result in a significant setback.”
Taiwan, South Korea missing from trio’s talk
In their discussion, the leaders of the three stimulus acts never mentioned Taiwan or South Korea, which together make the world’s most advanced semiconductors. Nor did they mention China.
Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung of South Korea are the only companies selling chips made with 7-nm-and-below process technologies that are used by Apple, Qualcomm, Nvidia and other industry giants.
As such, TSMC and Samsung are indispensable parts of the supply chain. Even so, Taiwan and South Korea are located in geopolitically risky places next to China and North Korea.
Neither South Korean nor Taiwanese government officials responded to EE Times’ requests for comment.
Wider partnerships needed?
Some see the need for wider partnerships that include Taiwan and South Korea.
“More cooperation is needed to rebalance the geopolitics of semiconductors,” Breton said in a separate presentation. “I am eager to work with the U.S., Canada, India, Japan, of course, [South] Korea, Singapore and, of course, Taiwan.”
Last week, HTC, a Taiwanese company that makes specialty process components and systems for chip manufacturing operations, trumpeted the opening “HTC-America,” its new North American HQ, in Arizona. “The move is driven by an increase in market demand in the U.S. due to new fab development and expansion as part of the CHIPS Act,” the firm said in prepared remarks.
Even big players like Samsung and TSMC must take advantage of the advanced technology created by a neutral R&D organization like imec, according to Paul Triolo, who advises global tech companies at Albright Stonebridge Group.
“No one company can master all the R&D of all parts of the supply chain,” he said. “It’s a real testament to the imec model, where they’re an increasingly global player.”
Imec said it is keeping the door open for China.
“Imec complies with all applicable export control and sanction regulations,” Jade Liu, an imec spokesperson, said in response to questions from EE Times. “We adhere to a robust, voluntary policy related to collaborations with Chinese companies and universities, based on export controls implemented by the United States. This policy has been further tightened in response to the global geopolitical evolutions. We are constantly looking at how we can respond to the changing geopolitical situation and are re-evaluating existing partnerships.”
Imec said its collaborations with Chinese companies focus on mature and older generation technology.