The EU's Microelectronics Dilemma

This, of course, is a good idea but we all rather thought that Pasquale Pistorio had made, and won, the argument that 'every macro-economic region needs controlled access to microelectronics', back in the 1980s.

In 1983 the Mega-Project launched with Siemens and Philips aimed at regaining microelectronics parity with the USA and Japan. That was followed by the EC-backed and organised JESSI, then MEDEA, MEDEA+ and now CATRENE and ENIAC.

What seemed to spoil the party was the 2007 decision of the Crolles 2 participants, Freescale, NXP and ST to trot off to IBM and TSMC for their basic microelectronics technology rather than develop it in France.

Of course Freescale and NXP weren't entirely to blame, having been taken over at that stage by the Wall Street private equity companies Blackstone and KKR.

But it must have been a bitter blow for the EC authorities to see 20 years of support for the industry chucked in their faces by managements looking to short-term financial considerations as opposed to long-term commitment to European technological independence.

In short, the NXP and Freescale moves were cynical. Why should the European taxpayer back cynics?

STMicroelectronics was a different kettle of fish. Without its Crolles 2 partners it was pretty much obliged to pull out of basic microelectronics R&D at Crolles and follow Freescale to IBM.

And Infineon was never involved in Crolles, either Crolles 1 or 2.

Now, as SEMI points out, European output of microelectronics is nose-diving - down 25 per cent between 2005 and 2007.

The industry desperately needs help. But how do you help people who can so lightly disregard the help they have received in the past?

Everyone wants NXP and Freescale to survive and thrive. But no one wants to see their owners Blackstone and KKR receive any benefit from European taxpayers' money.

That's a heck of a dilemma.