布鲁盖尔-A-new-direction-for-the-European-Union-s-half_21页_510kb

Summary of "A New Direction for the European Union's Half-Hearted Semiconductor Strategy"

Core Content

Semiconductors are a critical component in modern technology and are essential for industries ranging from smartphones to cars. Due to their strategic importance, they have become a focal point in the US-China technological and geopolitical rivalry. The European Union (EU) has recognized the need to strengthen its position in the semiconductor sector but has struggled to do so effectively due to its limited domestic production capacity and insufficient industrial strategy.

Main Points

1. Semiconductor Industry Overview

• Semiconductors are the core input for technologies such as faster computers, 5G antennas, and digital sensors.
• The industry is highly concentrated, capital-intensive, and R&D-driven.
• High-end chip fabrication is dominated by TSMC (Taiwan) and Samsung (South Korea), while the US leads in design.
• Europe has a small role in semiconductor production and is a major supplier of materials and equipment.

2. Global Supply Chain Dynamics

• The semiconductor value chain includes three main steps: design, fabrication, and assembly.
• The foundry model is the most advanced and is responsible for producing high-end chips used in cutting-edge ICT goods.
• TSMC and Samsung control the majority of high-end chip fabrication, with TSMC leading in manufacturing capacity.
• China is increasing its presence in the sector, especially in design and assembly, but still lags in high-end fabrication due to lack of talent and access to advanced equipment.

3. EU's Strategic Position and Challenges

• The EU's share of global semiconductor trade has declined from 22% in 1998 to 9% in 2017.
• European firms are not competitive in high-end chip fabrication, despite their role in supplying key inputs like silicon wafers and manufacturing equipment.
• The EU's strategy has focused on increasing fabrication capacity, but this is not the most effective approach due to the sector's high capital requirements and the EU's relatively low domestic demand.
• A more targeted strategy, focusing on chip design and software R&D, is recommended to increase Europe's value added in the sector.

4. State Support and Innovation Ecosystem

• The semiconductor industry has historically been shaped by state support, with the US, Japan, and China leading in this regard.
• The US supported the industry through university research and public procurement, while Japan and China used state-led investment and strategic planning to catch up.
• Europe's innovation ecosystem is characterized by strong basic research and large consumer products firms, but lacks the entrepreneurial spirit and investment incentives seen in the US and Asia.

5. Semiconductor Shortages and Geopolitical Risks

• In late 2020, a global semiconductor shortage emerged due to increased demand from the pandemic, supply chain bottlenecks, and Chinese stockpiling.
• The shortage affected major industries, including automotive and ICT, with production delays and stock depletion.
• The shortage highlights the systemic risks of the industry, including limited production capacity and long investment cycles.
• The EU's current strategies are insufficient to address these challenges and improve its competitiveness.

Key Information

• Fabrication is the most capital-intensive and concentrated part of the semiconductor industry.
• Design is a major strength of the US, with firms like Qualcomm, Nvidia, and AMD leading the market.
• China's Made in China 2025 strategy aims to reduce reliance on foreign suppliers and increase domestic production, but progress has been slow.
• The EU's role in the industry is mainly in materials and equipment, not in high-end fabrication.
• The EU needs a more targeted strategy that leverages its strengths in design and R&D rather than competing in fabrication.
• The US-China rivalry has created a "technological cold war," where control over semiconductors is seen as a key to economic and political dominance.
• The EU's reliance on external suppliers makes it vulnerable to disruptions from the US-China conflict.
• The EU should focus on policy tools and industrial strategy to enhance its position in the sector, rather than engaging in a subsidy war for fabrication.

Conclusion

The EU's semiconductor strategy needs to shift from a focus on fabrication to a more strategic emphasis on design, R&D, and innovation. By leveraging its strengths in materials and equipment, and by investing in chip design and software development, the EU can increase its value added and global influence in the semiconductor industry. However, without significant investment and a more coherent approach, the EU risks falling further behind in this crucial sector. Ensuring supply chain security and sustainable growth should be central to any new strategy.