Europe doesn’t need a $30 billion white elephant

By Alex Webb for Bloomberg – The continent desperately wants to become self-reliant when it comes to tech. But it’s focusing on the wrong things.

In parts of southeast Asia, white elephants were long considered a symbol of prosperity because they were expensive to maintain and served little practical purpose. It’s an apt metaphor forEurope’s latest plan to catch up with the U.S. and Asia in technology.

The European Union is considering the construction of its own advanced semiconductor manufacturing facility, Bloomberg News and others reported on Thursday. The ambition to make next-generation silicon chips is admirable, but it’s also wildly misplaced. Yes, these underpin most of today’s cutting edge technologies — smartphones, virtual reality goggles, data centers and plenty more besides. But there’s simply not enough demand for these particular chips in Europe, and there isn’t likely to be any time soon.

In chipmaking, three countries dominate the market: the U.S., Taiwan and South Korea. Because their domination extends back decades, an ecosystem of suppliers, customers and skilled workers has developed around them. It means the big players, particularly Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co., can invest in new production facilities with the confidence that they will not only be able to source the components and employees they need, but also that customers will be waiting on their doorstep.

European chipmakers such as Infineon Technologies AG and NXP Semiconductors NV also rely on them. But events of the past two years have heightened fears about Europe’s technological sovereignty and the idea that it is too dependent on imports of critical technology… Full article

Image: Who has the chips? – Courtesy of Bloomberg, 2021