A European Chips Act to play catch-up with the US and Asia:
The European Union finally agreed on a new plan to boost its microchip industry. The multi-billion investment is focused on strengthening Europe's technological leadership, the EU said, but it could very well be an attempt to put the Old Continent on par with what market leaders are already doing right now.
After spending some months negotiating between the European Council and the European Parliament, the European Union has now officially approved a plentiful subsidy plan for its semiconductor industry. The European Chips Act will put €43 billion (roughly $47 billion) to bolster Europe's "competitiveness and resilience" in the microchip business, promoting an effective digital and green transition powered by hi-tech technology.
Right now, Europe has a 10% market share of global chip manufacturing; with the EU Chips Act, Brussels plans to double the EU's production capacity to 20% of the global market by 2030. The plan is also focused on strengthening Europe's research and technology capabilities over chip advancements, building innovation capacity in design manufacturing and packaging, developing an in-depth understanding of the global semiconductor supply chain, and addressing the skills shortage by attracting new talents and growing its own skilled workforce.
Microchips already are "strategic assets for key industrial value chains," the EU said, while the digital transformation opened new markets for the chip industry such as highly automated cars, cloud, IOT, connectivity, space, defense and supercomputers. The recent global semiconductor shortages also showed how the global supply chain has an "extreme" dependency on very few actors in a complex geopolitical context.
[...] As a matter of fact, the final EU Chips Act contains some additional provisions which were not included in the initial draft. Besides funding the manufacturing of cutting-edge semiconductor technology, the plan will also cover the entire value chain with older chips and research & design facilities. The EU Chips Act is coming after the world's powerhouses in the chip industry (USA, Taiwan, South Korea, Japan) have already approved or are in the process of approving their own subsidy initiatives. Therefore, Brussels' money to boost EU semiconductor output won't guarantee success.
(Score: 3, Interesting) by ElizabethGreene on Thursday April 20, @01:23PM (6 children)
Chip manufacturers are already struggling with a significant oversupply, assumably due to the recession and restrictions on semiconductor trade with China.
Samsung to Cut Memory Chip Output - https://soylentnews.org/article.pl?sid=23/04/08/1735257 [soylentnews.org]
British Chipmaker Issues Warning About Inventory Glut - https://soylentnews.org/article.pl?sid=23/03/13/1347221 [soylentnews.org]
Western Digital, Micron, Nvidia Fall On Chip Glut Amid Recession Fears - https://soylentnews.org/article.pl?sid=22/12/19/0115233 [soylentnews.org]
The USA is working to put additional new supply online.
https://en.wikipedia.org/wiki/CHIPS_and_Science_Act [wikipedia.org]
China, cut off from many categories of semiconductor imports, is forced to build more supply.
https://www.reuters.com/technology/china-plans-over-143-bln-push-boost-domestic-chips-compete-with-us-sources-2022-12-13/ [reuters.com]
TFA indicates Europe is bringing on more supply.
I only took High School economics, but I don't see how increasing supply in an industry already overloaded with capacity could possibly be a good thing. Is it possible to short the entire semiconductor manufacturing industry?
(Score: 4, Insightful) by takyon on Thursday April 20, @03:50PM (1 child)
Major nations need to have their own supply secured in case a widely anticipated geopolitical event happens, or even just for national security reasons.
Oversupply could be a good thing for the consumer. I would like 128 GB of RAM in my next $100 laptop.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 4, Insightful) by SomeRandomGeek on Thursday April 20, @04:39PM
Several recent events have all contributed to a lot of countries seeing things in geopolitical terms that they used to see in purely economic terms:
1. The COVID pandemic caused a microchip shortage that had spill over affects on a lot of other areas of the economy.
2. The Russian invasion of Ukraine resulted in supply disruption to things that other countries get from Russian and Ukraine, including petroleum, wheat, and helium.
3. The Russian invasion of Ukraine has highlighted how much modern militaries depend on on microchips.
4. The US/China rivalry has gotten uglier as a result of increased authoritarianism in both countries.
5. Taiwan, which has always been at risk of invasion from China, now produces 90% of the worlds advanced microchips.
Can anyone connect the dots?
(Score: 2) by quietus on Thursday April 20, @05:17PM
There are semi-conductors, and then there are semi-conductors. Is it possible to imagine any new and competitive machinery [bosch-presse.de] without, presumably specialized, chips in it?
(Score: 1, Informative) by Anonymous Coward on Thursday April 20, @09:19PM
> Is it possible to short the entire semiconductor manufacturing industry?
Well, this exists: https://www.nasdaq.com/articles/4-mutual-funds-to-tap-the-boom-in-semiconductor-space-2021-04-13 [nasdaq.com]
One sample fund description:
If there's a mutual fund for it, there's probably someone willing to take your short bet against that fund (??)
(Score: 2) by ChrisMaple on Friday April 21, @02:28AM (1 child)
Every time I start a new project design, half of the chips I'm interested in are out of stock and have half-year lead times at Digikey and Mouser. Lead times like that mean that there is no manufacurer's stock anywhere, nor any stock at any distributor. We're waiting for the next wafer run at the manufacturer. That's not an oversupply.
If some manufacturers are cutting back production on some product lines while other products are in short supply, that's a sign of misallocation of resources.
(Score: 0) by Anonymous Coward on Friday April 21, @02:54AM
> that's a sign of misallocation of resources.
Another option, car companies (for one example customer) are willing to pay higher than normal prices, so they have booked up the fabs.