Beginning of competition for initiative to get rid of dependence on US
EU, after passing the 63 trillion won support law last month
Support of KRW 1.47 trillion for the Infineon plant
“We need to expand semiconductor production in Europe”
Infineon Technologies, Germany’s largest semiconductor company, started construction of a new semiconductor manufacturing plant with an investment of 5 billion euros (approximately 7.3 trillion won), the largest since its foundation. The groundbreaking ceremony held in Dresden, Germany on the 2nd (local time) was attended by German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen, demonstrating Europe’s will to become a global semiconductor hub.
Infineon announced on the same day that it held a groundbreaking ceremony for its new semiconductor plant, ‘Smart Power Lab’. Jochen Hanebeck, chairman of Infineon’s board of directors, said at the groundbreaking ceremony that day, “World semiconductor demand will continue to grow strongly thanks to high demand for renewable energy, data centers and electric mobility.” EU Commission President von der Leyen emphasized, “As geopolitical risks are growing, semiconductor production projects in Europe must be further expanded (for the stable supply of semiconductors).”
Regarding the fact that Infineon, the global leader in semiconductors for automobiles, has embarked on a large-scale investment in semiconductors, it is evaluated that Europe has reduced its dependence on semiconductors from Asia and the United States and entered into competition to become a ‘semiconductor hub’ in earnest.
At the EU level, it plans to provide 1 billion euros (approximately 1.47 trillion won) to this plant through the Semiconductor Act. On the 18th of last month, the EU agreed to implement the Semiconductor Act to support 43 billion euros (approximately 63.4 trillion won) to reduce dependence on semiconductors in Asia and the United States and foster the European semiconductor industry. The goal is to increase the EU’s global semiconductor market share from 9% to 20% by 2030.
An additional clean room will be added to the new plant, which will go into operation in the fall in three years from the size of three soccer fields (20,000 m2) next to the existing production facility (area of about 40,000 m2). The total production facility will increase to 1.5 times the current level. The new plant will produce semiconductor components for renewable energy facilities and electric vehicles. It is estimated that 1,000 high-skilled jobs will be created.
Infineon’s Dresden plant is located in Silicon Saxony, Europe’s largest high-tech industrial complex. Silicon Saxonie, which produces about one out of three semiconductors produced in Europe, is the European semiconductor hub. The annual sales of Silicon Saxony, where about 2,500 resident companies create various synergies, are about 23 trillion won.
Major European countries expect to receive a more stable supply of semiconductors through the expansion of Infineon factories. In Europe, there are major automotive semiconductor companies such as NXP of the Netherlands, Infineon of Germany, and STMicroelectronics of Switzerland, but production has been consigned to TSMC in Taiwan. Previously, there was no problem with the division of labor, which was designed in Europe and produced in Asia, but the situation has changed after experiencing the novel coronavirus infection (Corona 19) pandemic. The need to reorganize the semiconductor supply chain has increased, such as causing disruptions in the production of finished cars due to a lack of supply of semiconductors for vehicles.
Infineon as well as STMicroelectronics are planning to build semiconductor manufacturing facilities in Italy. In addition, Intel in the U.S. and TSMC in Taiwan are discussing plans to build semiconductor plants in Europe.
As Samsung Electronics and SK Hynix are making large-scale investments in Korea and the United States, the possibility of building factories in Europe is not high. However, once a semiconductor plant is built and operated in Europe, it is expected that competition will intensify in the system semiconductor area.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.