European Union weighs deal with TSMC, Samsung for chip foundry
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Final Assembly
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • The course was planned for a Vermont ski resort, until neighbors shouted the idea down.
      Off-road course for Broncos? Not in my backyard
      The 1965 Mustang Shelby GT350 reigned supreme in the Ford Frenzy tournament.
      Shelby GT350 gets its one shining moment
      Dan Parker will pilot his Chevrolet Corvette with a custom guidance system that provides audible feedback.
      Blind racer gets Cruise support, but he'll drive
      You may have won! But no
    • GAC Motor Co. launched sales of a new full electric crossover, the Aion Y, in March.
      New-vehicle sales rebound 75% in March from virus-hit 2020
      Wuling launched sales of its first pickup, the Zhengtu, on March 18.
      GM Q1 sales rebound but fall short of pre-COVID level
      The Ford Equator SUV arrived in the Chinese market on March 28
      Ford Q1 sales surge 73% over virus-hit 2020
      Xpeng P7 sedan on display at an auto show
      EV maker Xpeng setting up third plant to meet demand
    • The industry is racing to modernize the way in which EVs are built
      As EV output explodes in China, e-axle drive assembly automates
      Plus to roll big rigs on a ‘continuum' toward self-driving future
      Lidar moves beyond vehicles to underpin a reimagined logistics chain
    • Seattle, Washington
      Seattle drafts blueprint to electrify transportation by 2030
      Waymo self-driving van
      Waymo co-CEOs bring double vision for self-driving future
      Uber driver
      Uber, Lyft use rides to vaccines to get drivers, customers back on the platform
      Uber and Lyft
      Uber dangles higher pay to lure U.S. drivers back but warns it will not last
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • Ad process evolves with pandemic
      Pandemic adds resonance to Garff effort
      Microchip illustration
      The latest numbers on the microchip shortage: GM production pummeled
      Moreno sets sights on Washington
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Citroen
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Lancia
      • Maserati
      • Opel
      • Peugeot
      • Ram
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • MITSUBISHI: 2022 Outlander
      • NISSAN: 2022 Pathfinder and 2022 Frontier
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Mach-E
      For Ford, 3rd-party charging network must improve to reap Mustang Mach-E potential
      VW logo with reflection
      VW lied to sell diesels; now it lied to sell EVs
      265725_XC90_Inscription_in_Birch_Light.jpg
      Volvo targets top talent in U.S., China with generous parental leave policy
      Fisker gets a rare second chance to build his own car company
    • In case of supply chain woes, break glass
      Quick! The Biden phone
      VW's Joke Is On You
      Joke Is On You
      In case of supply chain woes, break glass
      view gallery
      3 photos
      Leo Michael Cartoons - Q2 2021
      Leo Michael: There's Nothing You Can Do!
      Nothing You Can Do
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • April 6, 2021 | For Volkswagen, authenticity is the only path forward
      March 30, 2021 | Tesla “changes” car industry
      March 23, 2021 | Remote work will continue after the pandemic
      March 16, 2021 | Industry offers warning to Apple
    • Tracy Fred
      Dealers deserve access to their data
      Ford's Blue Advantage tool shows it's ‘listening' to dealers
      Jamie Butters
      EV rebates must work at retail
      Dan Shine
      Service drive can lift dealerships as source of used-vehicle inventory
    • Why Xiaomi holds promise of becoming formidable EV player
      Geely’s new EV push is decidedly new age
      Charging poles installed outside a Tesla store in downtown Shanghai.
      Unreliable public EV charging sites prompt automakers to take wheel
      VW Group's playbook to dominate EV market
    • A step in right direction for Nissan dealers
      ‘Voltswagen' April Fools' gag far from funny
      Less is more in lineups as well as on lots
      Electric vehicle charger
      Electric vehicle hype opens door to short sellers
    • ‘Voltswagen' was clever and fun
      With EVs, bias for traditional carmakers
      There goes VW recycling again
      Mixed-use plan a winner
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: EV battery decision looms for SK Innovation, LG Chem
      AutoNews Now: Ford skipping summer shutdown at many U.S. plants
      Mercedes leads Lexus, BMW in tight luxury race
      AutoNews Now: Chevy's electric Silverado to have more than 400 miles of range
    • First Shift: Hyundai to idle more output due to chip shortage
      First Shift: Biden's EV plan said to include $100B for consumer rebates
      First Shift: Stronger auto emissions rules coming by July, EPA head says
      First Shift: Automakers urge U.S. government to help with chip crisis
    • How a Seattle-area dealer is teaching, retaining auto techs 
      Virtual sales manager Jay Barger
      'Glued to a phone': Acura store's virtual sales boss lifts deliveries, efficiency
      One man’s journey from homelessness to thriving dealer
      Bert Ogden Auto Group
      How a Texas group is cutting costs, saving millions
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Fixed Ops Journal Forum
    • Shift: Mobility at a Crossroads
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
      • Register for the 2021 Best Dealership To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Cars.com
    • DealerPolicy
    • Gentex
    • IHS Markit
    • Remember Group
    • Reputation.com
    • Ricardo: Dave Shemmans
    • Ricardo: Marques McCammon
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Capital One Auto: Dealerships remain vital to an increasingly digital car shopping journey
    • DealerSocket: 5 steps to modernizing the buyer's journey
    • Epic Games: Real-time tech is the next frontier of automotive
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • Google: Google's dealer guidebook helps dealers navigate today's digital landscape
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: COVID-19: The future mobility delusion
    • Level5: 2020 Automotive E-Commerce Report
    • Motormindz: Toward hyperconnectivity: 5 ways to position your business to profit from connected car
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. Microchips
February 11, 2021 07:51 AM

EU weighs deal with TSMC, Samsung for microchip foundry

NATALIA DROZDIAK and HELENE FOUQUET
Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Taiwan microchips

    The European Union is considering building an advanced semiconductor factory in Europe in an attempt to avoid relying on the U.S. and Asia for technology at the heart of some of its major industries.

    The EU is exploring how to produce semiconductors with features smaller than 10 nanometers, and eventually down to 2 nanometer chips, according to people familiar with the project. The aim is to curtail dependence on countries such as Taiwan for chips to power 5G wireless systems, connected cars, high-performance computing, and more.

    Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. of South Korea, the two leaders making the most innovative processors in the sector, could be involved in the EU project but nothing has been decided, a French Finance Ministry official said in a press briefing on Thursday, following the report from Bloomberg.

    The plans come at a time when automakers are grappling with semiconductor shortages. Europe’s biggest carmaker, Volkswagen Group, lost tens of thousands of cars in production, and Daimler has said it’s doing everything it can to minimize effects of the industrywide supply bottleneck. While the problem may prove to be short-lived, the issue has highlighted Europe’s reliance on sourcing key technology from abroad.

    European attempts to ramp up production -- led in part by European Industry Commissioner Thierry Breton -- could involve re-developing an existing foundry or building a new one, the people said, who added no final decision has been taken and the time frame of the project is still to be determined.

    A European Commission spokesperson did not respond to requests to comment. A spokesperson for TSMC declined to comment.

    Related Article
    Chip crisis pulls the reins on recovery

    Once a hub of semiconductor factories, Europe has dramatically cut back on manufacturing over the past 20 years, with automotive-chip designers including NXP Semiconductors and Infineon Technologies preferring to outsource a major chunk of production to giants like TSMC, and other foundries. When automakers wanted to increase orders at the end of 2020, they struggled to secure capacity, after demand had already been allocated to other industries such as smartphones.

    The EU outlined a goal last year to produce at least one-fifth of the world’s chips and microprocessors by value, without giving details on how this would be achieved. “Without an autonomous European capacity on microelectronics, there will be no European digital sovereignty,” Breton said in a speech, adding that Europe currently accounts for less than 10 percent of global production of processors and other microelectronics.

    To reach those goals, the European Commission, the bloc’s executive body, said it would launch a European alliance on microelectronics, which will likely include Europe’s major chipmakers and possibly also automakers and telecom companies. Technical work is ongoing to map out a plan for the alliance, but initial discussions about the fabrication plans have already taken place, according to people familiar with the matter. The alliance is due to be formally unveiled at the end of the first quarter of the year.

    Europe’s plans to reinvest in leading-edge chip fabrication may be too little, too late as China, Japan and the U.S. all try to increase or regain their self-sufficiency in semiconductors. But all are slipping further behind industry leaders Samsung and especially TSMC, which announced capital spending of as much as $28 billion for this year.

    The industry has also spent decades crafting a well-oiled global supply chain that would be difficult to change overnight, according to Peter Wennink, chief executive officer of ASML Holding of the Netherlands, which has an effective monopoly on the machines needed to fabricate the best chips. Regions will have to rebuild a local ecosystem, which in turn would likely raise costs.

    “If you think that you can actually replicate that within a very short term, it’s simply not possible,” Wennink said at ASML’s full-year earnings press conference in January. “If governments are determined to do this, it will take years to break this up, and not months.”

    In Europe, some semiconductor companies have questioned the EU’s plans to make 2 nm chips, which aim to challenge industry leaders Samsung and TSMC. The Asian companies, whose current leading-edge chips are 5 nm, both have plans to go down to the even more advanced 3nm.

    Automakers traditionally use relatively basic chips, but as cars made by Tesla Inc. and VW have become increasingly reliant on software, the demand for smaller semiconductors has increased. GlobalFoundries is Europe’s main foundry, which typically produces 28 nm processors at its Dresden factory for mainstream applications.

    “In terms of geo-strategy and from a resilience perspective in the international system, it would make a lot of sense to have an advanced foundry” in Europe, said Mathieu Duchatel, who heads the Asia program at the Institut Montaigne, adding that while there may currently not yet be a need for 5 nm chips in Europe, decades in the future it could be of use, particularly in defense innovation.

    One of the biggest hurdles for the EU’s semiconductor plans could come down to financing. At a conference last week, French Finance Minister Bruno LeMaire said Europe’s industrial projects, including semiconductors, are all very investment intensive. “One of the weak points is the access to risk capital in Europe and the implementation of the capital market in Europe,” he said.

    Breton said last year the chip alliance would be armed with an initial combined public and private investment of up to 30 billion euros, only slightly higher than TSMC’s annual capital expenditure this year. Around 19 member states have already backed the commission’s plans and have agreed to establish an investment instrument co-financed by the countries and participating companies. At least 20 percent of the EU’s 672.5 billion-euro recovery fund has also been allocated for digital priorities, including microelectronics

    RECOMMENDED FOR YOU
    HAAH considers a Korean import solution
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    HAAH considers a Korean import solution
    HAAH considers a Korean import solution
    Chip shortage could stretch for years
    Chip shortage could stretch for years
    The latest numbers on the microchip shortage: GM production pummeled
    The latest numbers on the microchip shortage: GM production pummeled
    Sponsored Content: PODCAST: Educating consumers during the online buying experience
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 4-12-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 4-12-21
    Read the issue
    See our archive
    BREAKING NEWS ALERTS: Sign up and be the first to know when big news breaks.
    AUTOMOTIVE NEWS TV WITH TOM WOROBEC: Sign up for our afternoon newscast and catch up on the top news of the day with our brief video roundup.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Citroen
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Lancia
          • Maserati
          • Opel
          • Peugeot
          • Ram
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • MITSUBISHI: 2022 Outlander
          • NISSAN: 2022 Pathfinder and 2022 Frontier
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Final Assembly
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Fixed Ops Journal Forum
        • Shift: Mobility at a Crossroads
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
          • Register for the 2021 Best Dealership To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Cars.com
        • DealerPolicy
        • Gentex
        • IHS Markit
        • Remember Group
        • Reputation.com
        • Ricardo: Dave Shemmans
        • Ricardo: Marques McCammon
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Capital One Auto: Dealerships remain vital to an increasingly digital car shopping journey
        • DealerSocket: 5 steps to modernizing the buyer's journey
        • Epic Games: Real-time tech is the next frontier of automotive
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • Google: Google's dealer guidebook helps dealers navigate today's digital landscape
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: COVID-19: The future mobility delusion
        • Level5: 2020 Automotive E-Commerce Report
        • Motormindz: Toward hyperconnectivity: 5 ways to position your business to profit from connected car
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds