ASML supports European leading-edge fab

ASML CEO Peter Wennink supports the ambitions of the European Commission and EU member states to (re-)establish cutting-edge semiconductor manufacturing on European soil. Speaking at a press conference alongside European Commissioner Thierry Breton and Imec CEO Luc Van den hove, Wennink said building leading-edge fabs in Europe makes strategic and economic sense.

Previously, Wennink didn’t seem particularly enthusiastic about the idea. “Wanting to build a factory for 2nm chips in Europe is the same as saying you want to build a rocket to send people to the moon,” he told Politico. That statement referred to Europe building the fab without any outside help, he clarified. When the goal is accomplished by partnering up with a chipmaker such as Intel or TSMC, as Breton intends to, the endeavor has the blessing of ASML’s top executive.

Wennink had also voiced concerns about countries and regions looking for technological sovereignty, or at least reducing their technological dependence. He warned that breaking up the “global frictionless semiconductor ecosystem” would increase cost. However, as it turns out, he doesn’t consider Europe building a fab to be a decoupling of the ecosystem but a prudent geographical distribution of manufacturing sites. Concentrating leading-edge semiconductor factories in only one or two places in the world is “too risky,” Wennink said.

Very profitable

At the press conference, Breton outlined the strategy to double Europe’s market share semiconductor manufacturing to 20 percent by 2030. It consists of two parallel strands. One focuses on forging an alliance of companies aimed at expanding Europe’s current strengths, getting trailing-edge (20-10nm) manufacturing off the ground, boosting IC design capabilities and fostering demand by getting the continent’s system companies involved. Breton said that he expects to officially announce the alliance “within a few months.”

Simultaneously, Breton is “inviting” the world’s leading-edge semiconductor manufacturers to build fabs in Europe. In fact, the official expects that they’ll gladly do so, considering that Europe’s tech industry will develop a ravenous appetite for such advanced ICs in 5-10 years, driven by the next phase of the digital revolution. Just like TSMC and Samsung are now building chip factories near their major US customers, they’ll want a presence in Europe.

Wennink backed Breton up on this. He said that “Europe will need sub-2nm chips” for applications such as edge computing, Industry 4.0, cloud infrastructure and autonomous driving. Imec’s Van den hove pointed out that innovation increasingly takes place on the system and technology level concurrently, providing further impetus for semiconductor manufacturers to cozy up to their customers.

So far, only Intel has publicly expressed interest to build a fab in Europe. Samsung has been silent on the subject, while TSMC just about rejected the idea entirely. Breton seemed unfazed by this, convinced of Europe’s business case, though he admitted that it needed to be lubricated by subsidies “just like Taiwan and the US do.” Wennink agreed that the fab would be a “very profitable investment.”

Marginal

Breton will likely cherish ASML’s and Imec’s support since Europe’s chipmakers aren’t very keen on joining the alliance. “We think Europe should focus on bringing modern but not state-of-the-art technology” to meet local demand, Infineon Technologies’ chief marketing officer Helmut Gassel told Bloomberg. “The vast majority, if not all of the components, in a car today and in the next five years to come won’t take any benefit from anything below 20 nanometers.” If the alliance plans were more targeted to the European ecosystem, including automotive, industrial and internet-of-things production, the company would be willing to participate, Gassel said.

Gassel’s statements echoed those of Jean-Marc Chery, CEO of STMicroelectronics. “If it’s about advanced technologies, we don’t have any reason to participate. That’s marginal to our activities,” stated Chery. NXP is participating in the discussions but hasn’t revealed its position.