SEMI: 500K jobs at risk with EU chip decline

by Françoise von Trapp, managing editor, Advanced Packaging

Dec. 10, 2008 — In a pre-emptive measure to avert an increase in unemployment throughout Europe — potentially half a million jobs — SEMI Europe is appealing to EU and national policymakers to invest in Europe’s semiconductor industry, citing its importance to the health and global competitiveness of the EU economy.

The thrust of SEMI’s plea being presented this week (Dec. 9-10) during the 3rd SEMI Brussels Forum, based on a white paper released during SEMICON Europa in early October, is that a decline in the European semiconductor industry could put as many as 500,000 European jobs at risk. According to SEMI Europe, equipment/materials producers and semiconductor device manufacturers combined contribute ~€29B directly to the EU economy and provide around 215,000 direct jobs; that number increases more than twofold when indirect jobs are included.

The European semiconductor industry value chain is a significant contributor to the GDP of 11 EU countries, according to a “competitiveness report” by the European Semiconductor Association’s (ESIA), and influences other key European industries such as energy, transportation, telecommunication, defense, aerospace, medical equipment, and biotechnology. One estimate puts the semiconductor industry at the origin of 90% of innovation made in these key sectors of the European economy, according to SEMI.

“If semiconductor manufacturers leave Europe, indigenous equipment and materials producers will face an uncertain future,” said Franz Richter, chairman of the SEMI European Advisory Board. “The current economic crisis and rising unemployment underscore the urgent need to safeguard jobs in the European semiconductor industry. Supporting a robust and competitive semiconductor industry in Europe is critical to keeping jobs in Europe across all industries and supporting key European economies.”

A review of the region’s landscape over the past two years from Heinz Kundert, president of SEMI Europe, further outlined a number of reasons to be concerned: reduced IC manufacturing in Europe, the trend towards fabless coupled with no plans for large fabs, relocation of manufacturing to other regions, a shift in priorities from growth to short-term profitability, and shrinking margins due to economics and unbalanced funding and compared to other regions. “To continue prosperity of our industry and Europe, a concerted vision is needed involving the industry, the EU and national governments to keep state-of-the-art manufacturing in Europe going,” he said.


Figure 1: Nanoelectronics manufacturing and R&D in Europe.

Enrico Villa, senior advisor to the CEO and COO for STMicroelectronics NV, presented highlights of ESIA’s aforementioned “2008 Competitiveness Report,” stressing the importance of micro- and nanoelectronics as drivers of innovation, and the absence of an alternative to semiconductors in driving progress. He talked about trends in the global playing field, changing paradigms, and a new global landscape for the semiconductor industry in terms of costs, product types and their performance/manufacturing/growth requirements, and a “deverticalization” of the value chain and financial markets (see Figure 2).

Villa presented a host of strategies and recommendations for restoring European competitiveness and keeping the semiconductor food chain alive. Europe needs to prioritize European-wide micro-/nanoelectronics R&D in framework programs and public-private partnerships, stimulate ‘market pull’ across Europe in chosen lead markets, launch a strategic European industry plan that aims at revitalizing semiconductor manufacturing capabilities in Europe, and make micro- and nanoelectronics in education an objective for filling the European talent pipeline.


Figure 2: “Deverticalization” of the value chain and financial markets.

The Brussels forum attracted 100 executives from the industry to show their support, as well as representatives from national governments, R&D and universities, clusters, and other associations. 16 countries were represented including Russia, Israel, and UAE. – F.v.T

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