In a major push to give Europe pride of place in the global semiconductor design and fabrication ecosystem, 17 EU member states this week signed a joint declaration to commit to work together in developing next generation, trusted low-power embedded processors and advanced process technologies down to 2nm. It will allocate up to €145bn funding for this European initiative over the next 2-3 years.
Recognizing the foundational nature of embedded processors, security and edge semiconductor technologies in everything from cars, medical equipment, mobile phones and networks to environmental monitoring, and smart devices and services, the European Commission said this is the reason it is crucial for key industries to be able to compete globally and have the capacity to design and produce the most powerful processors.
The joint initiative between the 17 member states aims to enhance cooperation and increase investment along the semiconductor value chain on equipment and materials, design, and advanced manufacturing and packaging, where feasible through the Recovery and Resilience Funds, a larger program committed to the green and digital agendas. As part of the latter fund, there are seven flagship areas earmarked for investment and reform, and one of these is the ‘scale-up’ flagship, of which semiconductors are a core component. Member states can mobilize industrial stakeholders to design an ambitious European Flagship project in the form of a second Important Project of Common European Interest (IPCEI).
Europe’s IPCEI framework is aimed at allowing member states to address market failures where private initiatives supporting innovation fail to materialize because of the significant risks such projects entail. The first IPCEI on microelectronics announced in 2018 involving France, Germany, Italy and the UK aims to complete its projects by 2024 and is focused on supporting R&D and innovation in energy efficient chips, power semiconductors, smart sensors, advanced optical equipment and compound materials.
Commenting on the new initiative announced this week among the 17 member states, Thierry Breton, commissioner for the internal market, said, “Europe has all it takes to diversify and reduce critical dependencies, while remaining open. We will therefore need to set ambitious plans, from design of chips to advanced manufacturing progressing towards 2nm nodes, with the aim of differentiating and on our most important value chains. Highly welcomed joint effort is an important leap forward – it will pave the way to the launch of an industrial alliance. A collective approach can help us leverage our existing strengths and embrace new opportunities as advanced processor chips play an ever more important role for Europe’s industrial strategy and digital sovereignty.”
In its declaration, signed remotely by state ministers over a video conference on December 7th 2020, the document notes Europe’s strengths in specific areas of the semiconductor industry, such as power electronics, RF technologies, smart sensors for embedded artificial intelligence (AI), microcontrollers, low-power technologies, secure components and semiconductor manufacturing equipment.
However, it adds:
“European chipmakers enjoy a strong global presence in vertical markets such as embedded systems for automotive and industrial manufacturing. Europe also has a strong technological position in mobile networks including current 5G and emerging 6G technologies. However, Europe’s share of the €440 billion global semiconductor market is around 10%, well below its economic standing. Europe is increasingly dependent on chips produced in other regions of the world – notably those used for electronic communications, data-processing and compute tasks, including processors.”
So, the new declaration aims to address this as indicated in the signed document:
“To ensure Europe’s technology sovereignty and competitiveness, as well as our capacity to address key environmental and societal challenges and new emerging mass markets, we need to strengthen Europe’s capacity to develop the next generation of processors and semiconductors. This includes chips and embedded systems that offer the best performance for specific applications across a wide range of sectors as well as edge manufacturing progressively advancing towards 2nm nodes for processor technology. Using connectivity, where Europe enjoys global lead, as a major use case driver for developing such capacity enables Europe to set the right level of ambition. This will require a collective effort to pool investment and to coordinate actions, by both public and private stakeholders.”
The declaration concludes:
“The signatories to this declaration agree to work together to strengthen Europe’s capabilities to design and eventually fabricate the next generation of trusted, low-power processors, for applications in high-speed connectivity, automated vehicles, aerospace and defence, health and agri food, artificial intelligence, data centers, integrated photonics, supercomputing and quantum computing, amongst other initiatives to bolster the whole electronics and embedded systems value chain. Furthermore, Europe can consolidate its position through joint and integrated action targeting applications and products with high-added value, as well as with complex and strong system integration of technology as a whole.”
“This Declaration aims at creating synergies among national research and investment initiatives and ensuring a coherent European approach of sufficient scale. It builds on, and will expand, collective efforts, including the future KDT and EuroHPC Joint Undertakings, the European Processor Initiative and the existing IPCEI on microelectronics. This will require investments from the EU budget, national budgets (including if feasible through the national Recovery and Resilience plans) and the private sector. Microelectronics, notably processor chips, are already among the key areas identified for investment for the Recovery and Resilience Facility. 20% of the European Recovery and Resilience plans should go to digital transition; this is up to 145B€ over the next 2 to 3 years. This opportunity to invest in research, design and production capability for processors in Europe should not be missed.”
Among the itemized points in the declaration, the states agreed to focus on the design ecosystem, supply chain capabilities and first industrial deployment of advanced semiconductor technologies, including scaling towards edge process technologies for processor chips. It also plans to work towards common standards and, where appropriate, certification for trusted electronics, as well as common requirements for procurement of secure chips and embedded systems in applications that rely on or make extensive use of chip technology.