Europe needs chip factories – economy

They are very small and are currently causing a lot of problems in the world. Semiconductors are suddenly scarce. Almost all automakers have to shut down production because there is no restocking. Experts have just calculated that the auto industry as a whole is short of more than $ 200 billion in revenue this year alone. Many other industries are also suffering: washing machines cannot be built, there are issues with cell phones, and wind turbine production is delayed. The great chip crisis has already become a serious threat to the global economy. Because bottlenecks could block the long-awaited recovery after the sharp drop in the pandemic.

The US government led by President Joe Biden is already holding crisis talks with everyone involved. Ursula von der Leyen, President of the European Commission, announced a European law on semiconductors to encourage investment. Politicians discovered the explosiveness, but unfortunately not in Germany. Among the German public, including in the Bundestag election campaign, the subject has so far hardly been accepted. Incomprehensible, as the German industry suffers particularly.

The chip crisis shows how important a strong semiconductor industry is to Europe. Semiconductors have long been the key, decisive technology, and demand continues to rise. Nowadays there are electronics everywhere, it depends on the many small circuits and sensors on silicon chips. An electric car, and supposed to run autonomously, for example, needs a lot more semiconductors than conventional vehicles, and without electronics it is not even possible to open the car window. But also for important projects such as energy transition or digitization, good semiconductors in sufficient quantity are essential.

Only one European remains among the greats: Infineon

For too long the industry has relied on something to rebuild itself. Dependence on Asia and the United States for this key technology has grown steadily, which is fatal in times of trade disputes and political uncertainties. Taiwan, for example, is a world leader in semiconductor production. There is great concern about what would happen if China increased its influence there and the flow of goods was diverted.

Today, less than ten percent of all semiconductors in the world are made in Europe, but the European economy needs much more. Today, there is only one European company among the ten largest chip producers in the world: Infineon from Munich. The European Commission now wants to double Europe’s proportion to 20 percent by 2030. The problem: Building a semiconductor factory, or fab for short, is complicated, expensive and time consuming. That’s why everything has to go faster, but the policy is too slow, negotiations with interested parties, funding processes and approval procedures take time.

There are also positive examples: Infineon has just opened a new factory in Villach, Austria, for a total of 1.6 billion euros. The construction time was only three years. Bosch, the world’s largest automotive supplier, opened a new production site in Dresden this summer. The capital of the Saxon state has become an exemplary flea site in recent decades – a biotope has emerged of large factories, suppliers and many experts.

Europe has already lost touch in many important areas, in the production of batteries or solar systems, in network technology, in mobile communications. In the chip industry, where technological change is faster than almost anywhere else, the comeback must be successful.

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