May 9, 2021

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Taiwan Dashes EU Rely Of Chip Production

EU failure. Taiwan’s government minister rejected the EU plan, and pointed to TSMC’s decision to focus chip expansion on Taiwan, not Europe

The European Union’s attempts to try to encourage more major chip making in the region do not look promising.

The EU’s failure came after Taiwan’s Economy Minister Wang Mei-hua on Wednesday quoted by Reuters such as playing the prospect of Taiwanese tech firms producing advanced semiconductors in the European Union.

The minister said industry leader TSMC, which is the world’s largest third-party chip maker, insisted it would focus on the most advanced technology in Taiwan, and not Europe.

Image credit: European Commission

The EU hopes

Europe of course has large chipmakers included Infineon, STM and NXP, but they do not make cutting-edge processors, but instead focus on niche markets such as chips used in cars.

But the European Union is trying to change that.

In March the EU said it wanted to produce at least 20 percent of the world’s cutting-edge semiconductors by the end of the decade. The proposals also call for a focus on technologies such as quantum computing and cloud infrastructure.

EU industry commissioner Thierry Breton also has recently met Intel chief executive Pat Gelsinger and a top TSMC executive, while the block seeks extra sway in the semiconductor supply chain.

Breton said the EU was looking to increase “autonomy” while maintaining its position in the global supply chain.

The EU commissioner wants to persuade a major chipmaker like Intel or TSMC to site a fabrication plant in the EU as part of the Digital Compass strategy.

The strategy aims to double Europe’s share of global semiconductor production to 20 per cent by 2030, as well as bringing production of the most advanced chips of its kind produced only by the likes of Intel, Samsung, TSMC and some others.

The plan is in stark contrast to current shortcomings that have exposed Europe’s reliance on chips made in Asia.

Lack of Chip, induced by turbulent market conditions during the Covid-19 pandemic, forced automakers to pause the manufacture of plants in Europe and around the world.

Faint outcome

But Taiwan’s Economy Minister Wang Mei-hua, has poured cold water on the EU’s plan to convince TSMC to set up a factory in Europe.

“Regardless of whether TSMC has established manufacturing facilities or continues cooperation in Europe, Taiwan will remain the home base for the most advanced technologies,” Wang was quoted as saying. Taipei Times speaking at a joint meeting of the Taiwan legislature’s Economics Committee, and the Law and Organic Law Committee.

Wang also played down the suggestion that TSMC could partner with the EU in an effort to reach “chip sovereignty” with advanced nodes.

“TSMC needs to decide on a global strategy and take into account commercial considerations when it comes to whether it establishes a plant in the EU,” he said.