EU Accelerates 'Semiconductor Development,' Will It Reach Out to Samsung Electronics and TSMC?

EU's Commitment to Developing Ultra-Fine Process Semiconductors... Only Two Manufacturers Capable
"Impossible to Catch Up in Short Term," Skepticism Arises

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the European Union (EU) accelerates efforts to foster the advanced semiconductor industry, which heavily depends on Asia and the United States, Bloomberg reported on the 11th (local time) that it could induce participation from Taiwan's TSMC and Samsung Electronics, the top two foundry (semiconductor contract manufacturing) companies.

Bloomberg cited a French Ministry of Finance official on the same day, stating that the EU is conducting a project to reduce dependence on the U.S. and Asia in the semiconductor industry, and is considering ways to involve Samsung Electronics and TSMC in this project. Although no final decision has been made yet, Bloomberg highlighted the possibility of collaboration as the EU aims for ultra-fine processes below 10 nm (nanometers, one billionth of a meter), ultimately targeting the 2 nm level. Only Samsung Electronics and TSMC in the world are capable of ultra-fine processes below 10 nm.

Regarding this, the European Commission and Samsung Electronics have not issued any specific statements, while TSMC said, "The choice of factory location requires reviewing various factors including customer needs, and while TSMC does not rule out any possibilities, there are no concrete plans at this time."

This news comes amid Europe’s recent semiconductor shortage crisis. Recently, Europe's largest automobile manufacturers, Volkswagen and Daimler, have suffered damages such as temporarily halting factory operations due to a shortage of semiconductors necessary for car production. This was caused by failing to secure semiconductors in time in response to the surge in demand after COVID-19. As a result, the German government even requested the Taiwanese government to expand semiconductor supply.

Europe once had many semiconductor factories, but major automotive semiconductor companies such as the Netherlands' NXP, Germany's Infineon, and Switzerland's STMicroelectronics have mainly outsourced production to Taiwanese foundries like TSMC and UMC, significantly reducing their own production over the past 20 years. Consequently, they were unable to urgently procure semiconductors despite the surge in automobile demand at the end of last year.

As the EU's dependence on semiconductors from the U.S. and Asia increased, it set a goal last year to raise the EU's share of global semiconductor and microprocessor production, currently below 10%, to about one-fifth. To achieve this, it plans to build an alliance including major semiconductor companies within Europe. According to sources, initial discussions about this alliance have already taken place, and the planning process is underway. Details are expected to be announced in the first quarter of this year.

However, Bloomberg reported that within Europe, realistically, considering that industry leaders Samsung Electronics and TSMC are currently focusing on developing 3 nm semiconductors beyond 5 nm, the EU’s plan to develop 2 nm semiconductors is seen as challenging. There are also evaluations that Europe’s semiconductor industry development plans are far insufficient compared to those of China, Japan, and the U.S. This is because Samsung Electronics and TSMC have announced large-scale facility investments this year, while the EU’s investment plans are considered grossly inadequate.

There are also concerns that restoring the global supply chain, which has been established over decades, in a short period will not be easy. Peter Wennink, CEO of the Netherlands-based ASML, which exclusively supplies extreme ultraviolet (EUV) lithography equipment for ultra-fine processes to Samsung Electronics and TSMC, said during last month’s annual earnings announcement, "If you think you can catch up with TSMC or Samsung Electronics in a short time, that is impossible," adding, "If EU governments try to pursue such goals, it will take years, not months."

This content was produced with the assistance of AI translation services.