European Commissioner for the Internal Market Thierry Breton is set to talk with Intel chief Pat Gelsinger and Maria Marced, president of Taiwan Semiconductor Manufacturing Company (TSMC) Europe later this week

The ongoing global semiconductor shortage is proving a major headache for various industries around the world, shining an unflattering light on the European Union’s reliance on foreign chip production. 

The shortage has been ongoing for some time, triggered first by the pandemic slowing production and exacerbated by various factors, from shifting market dynamics to geopolitical tensions. 

Part of the issue rests with the exploding demand for high-end chips in an ever more connected world, coupled with the semiconductor industry’s slow process of scaling up accordingly. While the chipmakers are building out more capacity as quickly as possible, this crisis is not likely to subside for many months; just three days ago, Cisco chief Chuck Robbins told the BBC that it would take “another six months to get through the short term” of the tech shortage.

For European Union (EU), this crisis has exposed a rather unpleasant truth – that the continent plays too small a role in global semiconductor market, being overly reliant on the US and Asia. 

To address this, European Commissioner Thierry Breton is on Friday set to meet with Pat Gelsinger and Maria Marced, head of Intel and TSMC Europe, respectively, to discuss the EU’s semiconductor ‘autonomy’ and boost the bloc’s production.  

As part of the Commission’s Digital Compass strategy, Breton is seeking to double Europe’s share of the global semiconductor production market to 20% by 2030. The plan also includes manufacturing the most advanced 2nm chips within the same time-frame. 

"Increasing our autonomy does not mean isolating ourselves in a world where supply chains are global," Breton told Reuters. "In parallel to exploring how we can increase Europe’s capacity…we will continue to build bridges with international partners – but with us in the driving seat."

Gelsinger, who took over as head of Intel in February, announced the company’s ambitious Intel IDM 2.0 strategy, which includes building additional production capacity in the US and Europe, as well as offering foundry services to third parties. Possible locations for a European fab include France, Germany, or Poland. 

TSMC, however, may be an even bigger prize for Breton. As the world’s largest semiconductor manufacturer, a major investment in Europe would represent a sizeable breakthrough for the European market.

However, the process of convincing these companies to set up shop in Europe will not be easy. On the whole, the continent does not manufacture high-end electronics, nor does it have a modern chip-design industry, meaning their path to success is far from clear. 


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