"Is Europe Still Competitive?" Addressed at ISS in Malta

Related article: View the write-up by David Ridsdale, Editor-in-Chief, EuroAsia.

“Is Europe Still Competitive?” Addressed at ISS in Malta

SEMI Europe’s annual Industry Strategy Symposium (ISS) took place in Malta on March 2–4. With distinguished speakers and panel discussions, the audience heard often opposing perspectives on the strengths and concerns of Europe’s semiconductor industry.

Over the course of the symposium, leading economists, company executives, product visionaries, and manufacturing experts presented their views on Europe’s opportunities. While it would be easy to ascribe much of today’s concerns with exchange rate woes, the presenters at this conference looked much deeper into the global perspective before making their conclusions.

The seminar opened with Alain Dutheil, the well-known chief operating officer of STMicroelectronics delivering the keynote speech on European competitiveness and the changing semiconductor industry landscape. Dutheil highlighted the global perspective of our industry, noting that over time, the leading chip-making companies dispersed; that is, they were once mostly American, but now have become Japanese, Korean, and European firms.

Dutheil noted that the European landscape was much different from other regions – there were many more but smaller companies, and it was difficult for them to achieve a “critical mass” that could sustain research and development. The founding of European consortia to work on common pre-competitive R&D projects was and still is a significant strength of the European industry. Projects like JESSI, MEDEA, MEDEA+, and today’s examples, CATRENE and ENIAC have shown that cross-border, cross-cultural and even cross-language communication is a strength of the European semiconductor industry.

Serious Challenges Exist

Dutheil noted that the European share of the world market for semiconductor devices is shrinking; the $41B of semiconductor products sold in Europe in 2007 was about 15% of the world market. However, he also highlighted the strength of the European design activity, where leading-edge competence in automotive products, wireless and connection products, and the general industrial market have kept European firms able to hold their own with the rest of the world.

He also identified the current exchange rate as a concern, but noted that innovation knows no currency, and that the European consortia such as IMEC and Fraunhoefer can rely on continued governmental support to expand their research work. The models they have developed to involve leading-edge semiconductor manufacturers and equipment and materials suppliers allows for a rapid move from research to development and product release, and Dutheil sees no end in this competitive advantage.

In conclusion, Dutheil sees that the higher costs of European manufacturing are more than offset by the many years of European experience in using universities, private companies, and government support to stay competitive. Exchange rates are of course a concern, but the best products based on the best innovation will always succeed in the market. He remains positive on a strong, competitive Europe for many years to come.

ISS Europe 2008

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SEMI would like to thank the executives that form the ISS Europe committee for their outstanding contributions to the agenda for this event.