EU Moves to Secure Semiconductor Production Facilities... Meeting Samsung Following Intel and TSMC?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As major countries around the world, including the United States and China, compete to dominate the semiconductor industry, the European Union (EU) has actively stepped up efforts to secure semiconductor production facilities. It is drawing attention as it is reported to have recently met with major global semiconductor companies such as the US-based Intel, Taiwan's TSMC, and Samsung Electronics, and is expected to offer substantial incentives or tax benefits to attract production facilities to Europe.

Thierry Breton, EU Commissioner for the Internal Market, shared a photo on the 30th of last month (local time) with Intel CEO Pat Gelsinger, stating, "We had a deep discussion. The EU aims to secure a 20% share of the global semiconductor production market by 2030," adding, "We will strengthen the EU's industry while enhancing transatlantic partnerships with global partners."

The EU announced a digital transformation roadmap last month, aiming to raise its current single-digit global semiconductor production share to 20% by 2030. This move comes amid the semiconductor shortage triggered by the COVID-19 pandemic, joining the semiconductor dominance race alongside the US, China, and Japan. Breton's meeting appears to be part of efforts to persuade Intel to establish production facilities in Europe.

In an interview with a media outlet on the same day, CEO Gelsinger said, "Both the US and European governments have requested us to enhance our competitiveness compared to Asia." He also revealed that Intel is seeking subsidies worth 8 billion euros to build semiconductor production facilities in Europe amid the current semiconductor shortage. Foreign media noted that this was the first time Gelsinger directly mentioned government support.

Commissioner Breton also held a video conference with Maria Marced, TSMC's European representative and leader of the 'foundry (semiconductor contract manufacturing) industry leader,' posting on Twitter with a photo, "To meet the current and future demand for the semiconductor industry, Europe will boldly increase production capacity with partners to ensure supply stability." TSMC also expressed willingness to continue discussions following the meeting with Commissioner Breton.

Foreign media reported that Samsung Electronics also met with Commissioner Breton on the same day along with Intel and TSMC. Although the EU side has not confirmed the meeting with Samsung Electronics, considering the active dialogue with major semiconductor companies, it is highly likely that communication with Samsung Electronics took place. Commissioner Breton is also scheduled to meet with the Netherlands-based ASML, which holds a monopoly on extreme ultraviolet (EUV) equipment, and Dutch automotive semiconductor company NXP on the 4th of this month.

Despite Europe's active efforts to secure semiconductor production facilities, it remains uncertain whether actual factories will be established. Analysts point out that semiconductor consumption within Europe is not as large as in other regions, making it difficult for companies to make massive investments. Accordingly, TSMC stated during its first-quarter earnings announcement last month, "Currently, there are no plans to build factories in Europe."

However, considering that semiconductor products are not significantly constrained by the location of production facilities, there is an opinion that tax benefits and other incentives offered by the EU could be decisive factors. Kim Yangpaeng, a researcher at the Korea Institute for Industrial Economics & Trade, said, "Semiconductors are not greatly affected by logistics costs or time," adding, "It could vary depending on the amount of tax benefits or incentives."

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