SIA, ESIA Lobby For Hand-Outs

While we’re used to Europeans trying to get hand-outs from government, it’s always interesting to see the Americans, who like to see themselves as proudly independent of government, on the lam for a subsidy. Last week we saw both.

The European Semiconductor Industry Association (ESIA) says Europe’s share of the worldwide market is now 13% (from 18% in 2004) and its share of global semiconductor production in Europe has declined from 12.5% in 2004 to 9.6% in 2009.

Europe’s response is to form a committee (what else?) called The High Level Group On Key Enabling Technologies.

There are no specifics but, on past form, it’ll be a lever for extracting money from the EC to prop up NXP, Infineon and ST.

The money would very likely be used to develop new products for business units which, in the case of NXP and Infineon, may well then  be flogged off to foreign companies. Not a good deal for the European taxpayer.

Companies shouldn’t be allowed to hunt with the EU hounds while running with the private equity fox.

America’s SIA has produced specifics. It wants funds for R&D; tax policies to encourage R&D and to keep manufacturing at home; reform of export controls; a streamlined licensing process; incentives for developing energy efficiency and renewable energy sources; dumping climate change policies which affect US competitiveness; improving US education, expanding university research programmes and making it easier for foreigners with advanced degrees to get green cards.

AsEurope’s leading semiconductor analyst, Malcolm Pen,n points out – there’s nothing in the SIA plan about building products that the market wants to buy at a price the customer is willing to pay, and there’s nothing about fabbing in the US.

“Right now”, says Penn, ” if the US firms doubled their exports they would also double their imports and further strengthen TSMC et al.”

It’s the same old story – companies cut back on the R&D to please their bean counters and then – when the new product stream dries up in consequence – they go cap in hand to the government for money to develop new products.

The lesson of the IC industry has always been clear – back new guys, don’t prop up the old guys.

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