Page 3 - EE Times Europe March 2022

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EDITOR’S LETTER

EU’s Resilience Act

The long-anticipated European Chips Act Acknowledging that no country or continent can be self-sufficient,
was released and trumpeted by European von der Leyen conceded that Europe will always keep global markets
Commission president Ursula von der Leyen open. “This is in the world’s interest. It is in our own interest, too, but
to bolster Europe’s competitiveness and what we need to tackle are the bottlenecks that slow down our growth,
resilience in semiconductors. Competitive- as we are just experiencing it right now. Therefore, Europe will build
ness is crucial in a globalized economy, but partnerships on chips with like-minded partners; for example, the
what does resilience mean exactly? Why is United States or Japan,” she said.
it so important to have a resilient semicon- To build long-term resilience, Europe has an interest in maintaining
ductor supply chain in Europe? the entire industrial value chain, from chip design to manufacturing
“Resilience” was a buzzword in the business world before the and testing. One question arises, however: Shouldn’t Europe focus on
Covid-19 outbreak. At the time, leaders tended to view resilience only leveraging its strengths to expand its position and nurture the depen-
from a balance-sheet perspective, sometimes without understanding dence of other players on European products?
the underlying dynamics. In the roller-coaster
ride of the pandemic, however, being agile
and resilient is no longer just an option. It is
a necessity.
Covid-19 has triggered major chip supply
chain disruptions worldwide that have
forced key industries such as automotive and
consumer electronics to halt or scale back
production. By mid-2021, lead time ranged
from 20 to 52 weeks for several types of semi-
conductors, resulting in manufacturing delays
or shutdowns and lost revenue in the tens or
even hundreds of billions of dollars, according
to a Deloitte report. By the end of 2022, the
consultancy firm expects that these lead times
will be closer to 10 to 20 weeks and the indus-
try will be in balance in early 2023.
As defined by the National Institute of
Standards and Technology, the term
“resilience” means the ability to prepare for
and adapt to changing conditions and with-
stand and recover rapidly from disruptions.
Bluntly, for the semiconductor industry, this
means preparing to weather economic uncer-
tainty and mitigate the threats.
Disruptions to the semiconductor supply
chain are likely to be more frequent, more severe, and less predictable The continent is indeed home to global powerhouses in chip design
due to escalating climate emergencies, rising trade protectionism and and state-of-the-art semiconductor manufacturing equipment and
geopolitical tensions, or other potential pandemics. Added to this is materials. Its world-class engineering education centers also contribute
the growing problem of availability and rising prices of raw materials as to research and development excellence. It is by continuing to invest
well as higher freight rates. massively in these assets that Europe will be able to guarantee its rele-
Speaking at the EU Industry Days on Feb. 10, Commissioner Thierry vance in the global semiconductor ecosystem.
Breton identified resilience as a critical enabler to Europe’s industrial The Chips Act is not yet a done deal. The proposed law will be dis-
transition. “The time has come for Europe to take its economic and cussed by the European Parliament and the Council in accordance with
industrial destiny in hand. I believe in a Europe that leads on the markets the ordinary legislative procedure.
of the future, not one that is a mere subcontractor,” he said, envisioning What we are sure of is that Europe’s future in semiconductors lies at
“a ‘factory’ Europe that creates jobs and gives itself the means to cater the intersection of resilience and relevance. ■
[to] its own needs but also to conquer world markets and export. It is not
a question of wanting to produce everything in Europe but of diversify-
IMAGE: SHUTTERSTOCK €43 billion of public and private investments and set measures to — Anne-Françoise Pelé
ing our sources of supply and securing the entire supply chain.”
As stated in the regulation proposal, the Chips Act will mobilize

prevent, prepare, anticipate, and swiftly respond to any future supply
disruption, together with member states and international partners. It
aims to double Europe’s share of global semiconductor production to
editor-in-chief of EE Times Europe
20% by 2030.
www.eetimes.eu | MARCH 2022