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Home > Industry News

Semiconductor factory building boom in Europe! The supply of local relevant materials may be tight

Update time : 2022-12-01 11:39:25

On November 29, it was reported that Europe has set off a trend of semiconductor factory building. Intel, TSMC and Samsung have announced that they will build wafer foundries locally. However, Techcet warned that this would lead to great pressure on the local semiconductor material supply chain.

According to the public information, the trends of some semiconductor manufacturers in Europe are as follows:
Intel's € 33 billion promotion of chip manufacturing in Europe. In March this year, Intel said that it planned to invest more than 33 billion euros to promote chip manufacturing in Europe. As part of the investment, Intel will build two new factories in Madelberg, Germany. Construction will start in the first half of 2023. Production will go online in 2027, and it will try to produce chips below 2nm.
In addition, Intel also promised to establish a new R&D and design center in France and invest in R&D, manufacturing and OEM services in Ireland, Italy, Poland and Spain.
TSMC may build a factory in Germany? In October, German media reported that TSMC was negotiating with Germany on building a factory in Germany, and it was expected to reach an agreement on site selection and government subsidies. It is reported that TSMC hopes to manufacture chips with a 16 to 28 nanometer process in Germany, including car chips that can be urgently needed in Germany and Europe. The possible location is Saxony Silicon Valley.
In response to the rumors about the establishment of a factory in Europe, Wei Zhejia, president of TSMC, pointed out at the French conference held in October that TSMC would continue to increase its production expansion layout, which does not rule out any possibility. However, it will depend on customer needs, business opportunities, operating efficiency and costs.
Samsung may consider building factories in Europe. In October, Korean media reported that as Europe actively seeks to turn the region into a semiconductor manufacturing center, Samsung may invest in building a new wafer foundry in Europe.
It is worth mentioning that Samsung shared its willingness to strengthen its auto semiconductor business at the technology forum held in October. The industry believes that if Samsung wants to strengthen its automobile chip OEM business, it is necessary to establish factories in Europe, because there are a large number of vehicle and component enterprises gathered there.
Crucially, in February this year, the European Commission announced the long-awaited A Chips Act for Europe. According to the bill, by 2030, the EU plans to use more than 43 billion euros of public and private funds to support chip production, pilot projects and start-ups, and vigorously build large chip manufacturers. The EU also proposed an ambitious goal in the bill to increase the share of chip production in the world from 10% to 20% by 2030.
The EU believes that Europe has advantages in specific areas of semiconductors, such as the design of power electronic components, RF and analog devices, sensors and microcontrollers (these devices are widely used in the automotive and manufacturing industries), and Europe is also in a very favorable position in terms of materials and equipment needed to operate large chip manufacturers.
However, Europe's overall share in the global semiconductor market is only 10%, and to a large extent depends on third country suppliers. According to the data released by the EU, in the semiconductor supply chain, the EU's market share in the equipment manufacturing field is 23%, in the raw material/silicon chip field 14%, in the chip design field 8%, and in the IP/electronic design field only 2%.
"The recent global semiconductor shortage has forced factories in many industries, such as automobiles and medical equipment, to close. In the automotive industry, the output of some member countries will decline by one third in 2021. This clearly shows that under the complex geographical ZZ background, the semiconductor value chain is extremely dependent on a few participants worldwide, which also shows the importance of semiconductors to European industry and society." The EU stated this in its press release introducing the bill.
The latest news today is that EU countries have agreed to allocate more than 40 billion euros to enhance the EU's semiconductor production capacity. Some media quoted people familiar with the matter as saying that the agreement was supported by European ambassadors. At the same time, the agreement will expand the scope of "first of a-kind" chip factories, which are eligible for state assistance, but will not include all car chips. It is reported that EU ministers are expected to approve the agreement at their meeting next month.
As mentioned above, large-scale new foundries need a strong chemical and material supply chain, but the current European chemical supply chain is extremely unstable. The reasons behind this include: the conflict between Russia and Ukraine this year caused energy problems; Low willingness of local chemical and gas suppliers to invest in equipment leads to insufficient supply; The logistics situation has become a hidden worry; In addition, European environmental regulations are stricter, and the supply chain is slow to follow up.
In the long run, while the wafer factory is expanding, the raw material supply chain must invest synchronously, otherwise the wafer factory will have to find more alternative sources for key raw materials. Techcet pointed out that in the future, hydrochloric acid, gas, sulfuric acid, hydrofluoric acid, ammonia and isopropanol (IPA) used in European semiconductors will be the high-risk group for chain breaking.
Techcet believes that in the next six years, wafer factories below 16 nanometers will expand at a high speed. For relevant chemical suppliers, the establishment of new factories can make semiconductor chemicals more quickly. Dan Tracy, senior director of Techcet, believes that if market conditions permit and capital subsidies such as joint investment are in place, European chemical suppliers are expected to consider investing in the establishment of plants, and the establishment of new plants will help meet the needs of advanced process chemicals.

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