I always thought Neelie would get her way. The redoubtable lady who slapped a billion euro fine on Intel and who has almost abolished the nefarious roaming charge is not to be trifled with.
Once she’d set the European semiconductor industry the task of achieving 20% world market share, the chickens in Europe’s semiconductor coop were in a fluster.
And they were chicken. Not one of the CEOs of the big device manufacturers wanted to embark on the journey of investment and technological progress which would have got Europe to a 20% world market share. They wanted to satisfy their shareholders, not be heroes.
Which is probably why the first report from the European Leaders’ Group (ELG), delivered on December 16th, was never published.
Instead of the ELG’s report, the EC wrote their own report on the ELG’s report – a bland, aspirational, wishy-washy document – saying the ELG’s implementation plan would be out in February. We had been originally been told that the implementation plan was coming out on December 16th.
So it was assumed that, in the December 16th report, the ELG tried to weasel out of the 20% commitment while seeking to take Neelie’s money without committing to any expensive or ambitious efforts of its own. One can only imagine the response of Kroes to a report which lacked her aspirational fervour. It is assumed that the ELG was told to think again.
And Neelie Kroes had a massive carrot to make them do so – 80 billion euros to put into the microelectronics industry.
If the big companies couldn’t use it, others probably could. The big companies didn’t want to lose out.
So, on Friday, the ELG came up with its implementation plan, and the good thing about it is – no weasels – the report commits the European semiconductor industry to achieving a 20% world semiconductor market share.
The aim is to get Europe from its current 9% world share, representing $27 billion worth of annual IC output, to reach 18% of a world market estimated at $400 billion in 2020 representing $72 billion worth of output. From then the intention is to get to 20% by 2025.
The report estimates that 20% market share, requires capacity of 250,000 300mm wafers per month, and says that a 50,000 wafer per month 20nm fab costs $8.9 billion. To get there, Europe will need to increase its capacity by 70,000 wafers a month every two years. The ELG suggests direct public investment in production fabs.
How do we fill these fabs?
Europe has 20% share of the worldwide equipment and materials industries, a 12% share of the world boards and modules market, a 16% share of the worldwide systems industry and around a 30% share in the worldwide embedded systems sub-sector, so there is, on the face of it, enough demand for silicon within Europe to fill fabs capable of supplying 20% of these sectors’ collective requirement.
In e-health, smart homes, smart cities, CO2 reduction, energy reduction and intelligent transport systems, Europe could get 60% market share, says the ELG.
In automotive, energy and industrial automation where it could double the value of production by 2020-5; and mobile/wireless where it can reach ‘20% of its projected growth’ whatever that phrase means.
Technology developments should include ‘very low power technologies, high performing low power digital technology based on SOI, photonics integration, 3D/multilayer silicon, language, compiler, debug chains for highly parallel systems, re-use and legacy and new non-volatile memory technologies.
This report does what it has been tasked to do – provide a road-map for the Kroes’ vision of 20% market share.
It may be a little vague on how it’s going to get there, it may trot out undefined clichés like ‘Smart Everything Everywhere’ and ‘Internet of Things’, but at least it’s not trying to shirk its purpose.
Here is Europe’s chance to maintain a leading-edge microelectronics presence for another generation.