EU Semiconductor Launch... Doubling Market Share by 2030

EU Commission Digital Transformation Roadmap "Will Reduce Dependence on Core Technologies"

[Image source= Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] The European Union (EU) Commission announced a digital transformation roadmap on the 9th (local time), declaring its intention to increase its global semiconductor market share to 20% by 2030. This means doubling the current market share of 10%. Analysts suggest that the EU has entered the semiconductor hegemony competition following the United States and China.

According to The Wall Street Journal (WSJ), the EU revealed its digital transformation goals for the next decade, setting a target of 20% semiconductor market share by 2030. The funding for investments is expected to come from the 672.5 billion euro (approximately 910 trillion KRW) COVID-19 economic recovery fund established last July. The EU has stated that more than 20% of the funds will be used for economic structural reforms and digital transformation. Accordingly, WSJ predicted that investments in new technology sectors such as semiconductors for digital transformation will exceed 150 billion dollars (approximately 170 trillion KRW).

Margrethe Vestager, EU Commissioner for Competition, said, "We need to reduce dependence on external sources in key technology sectors."

This statement is similar in context to what U.S. President Joe Biden said when he signed an executive order on supply chain review on the 24th of last month. President Biden instructed a review of supply chains for four key resources?semiconductors, batteries, rare earth elements, and medical supplies?emphasizing the need to reduce overseas dependence on critical resources and components. He particularly stressed the importance of reviewing the semiconductor supply chain.

The reason why the U.S. and EU are emphasizing semiconductor procurement is due to the recent global semiconductor shortage, which has disrupted automobile production worldwide.

Due to the recent semiconductor supply shortage, electric vehicle manufacturer Tesla Motors halted factory operations, and General Motors (GM) plans to reduce production at three North American plants until mid-month. Korea GM's Bupyeong Plant 2 is also operating at half capacity. As manufacturing production has stopped due to the semiconductor shortage, the importance of semiconductors is increasing.

Margrethe Vestager, EU Commissioner for Competition [Image source= Reuters Yonhap News]

China established a 29 billion dollar fund in 2019 to invest in its domestic semiconductor industry. At the National People's Congress (NPC) that opened on the 4th, it emphasized strengthening research and development in the semiconductor sector. In the draft of the '14th Five-Year Plan and Long-Term Goals through 2035' revealed at the NPC plenary session, semiconductors were listed as one of the seven key scientific research areas.

China is pushing for a "semiconductor rise," aiming to increase its domestic semiconductor self-sufficiency rate to 70% by 2025. However, last year, the semiconductor self-sufficiency rate was only 15.9%.

Meanwhile, regarding the EU Commission's declaration to expand semiconductor market share, some critics point out a lack of concrete plans. WSJ noted that Europe's major semiconductor companies such as the Netherlands' ASML and NXP Semiconductors, and Germany's Infineon, are smaller in scale compared to companies like the U.S.'s Intel and Taiwan's TSMC. Consequently, there are forecasts that the EU will need to foster the semiconductor industry through partnerships with external entities.

Dan Wang, an analyst at market research firm GabeKal Dragonomics, pointed out, "The number of European semiconductor companies has continuously declined over the past several decades," adding, "To compete with U.S. and Asian semiconductor companies, enormous effort and investment are required."

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