Sector's insights

Microchips ¿made in Europe?

23 de May de 2022

The crisis caused by the pandemic has put production processes in check, and has brought to the surface technological and infrastructural dependencies that are difficult to solve in the short term. This is the case of microchips, 87% of the world’s production of which is now in Asia.

Asian dependence

The Asian continent is currently the absolute leader in everything related to the manufacture of semiconductors, bringing together foundry, design and hardware creation centres, and is the main supplier to other countries, with a production of 31.6 billion chips per month.

TSMC – located in Taiwan – has a 54% market share. Not only does it dominate all aspects of manufacturing, but it is also the technology company of reference for new innovations, such as the production of highly integrated 3-nanometre chips, which require slower and more complex manufacturing processes.

What are Europe’s needs?

Europe’s needs are more than notable; reducing dependence on these components is one of the European Union’s priorities, with the aim of enabling industries to adapt to their own production cycles and avoid unnecessary downtime in the value chain. One of the most affected companies is Stellantis, which has spent up to 25 days without manufacturing a light commercial vehicle with a combustion engine due to a shortage of chips. As a result of this problem, the company is already planning a strategy to have European chips in the coming years and has decided to manufacture four new families of microchips to cover more than 80% of its needs.

To tackle these problems, the EU has approved a new €11 billion EERP, with the aim of ensuring that Europe does not miss this train that is at the forefront of industrial progress. The main aim is that by 2030, 20% of the world’s chips will be manufactured in Europe, which will require a fourfold increase in current production, which currently stands at just 8%.

Boosting European relocation

With the evidence of the manufacturing shortage and the necessary impetus from public entities, local European companies are launching themselves into this accelerated race. In Galicia there are several, such as Televés, which produce microchips based on MMIC technology, with a high degree of miniaturisation and a complex design process. In 2021 they launched their 3 millionth microchip and are already working on the next generation of circuits to reduce electronic components to a minimum and design integrated circuits for radio frequency applications.

Likewise, in Galicia, the University of Vigo and Zona Franca are looking to build the first optical microchip factory in southern Europe. The project has been in the pipeline for more than a year and a half and aims to raise up to 25 million euros from Next Generation funds. Far from being the same microchips that are manufactured on the Asian continent, this production plant will require less investment and will also have a wide application in the automotive, aerospace, metallurgy, naval and telecommunications sectors.

In this context, and with such a marked dependence on the Asian giant in innovation and semiconductor manufacturing, the alternative for the economy of Western countries is to manufacture their own. Everything points to the fact that only with less dependence in industrial matters, with a commitment to a European relocation of key activities such as semiconductors and their entire value chain, will industries be able to become self-sufficient in terms of innovation and digitisation.