Intel, TSMC to Increase Investment in Europe

The European Union is working on its own Chips Act so that Europe’s production share in the global semiconductor market can rise to 20 percent from the current level of 9 percent based on 43 billion euros of subsidies and investments.

The European Union is the world’s third-largest market with a proportion of 20 percent in terms of semiconductor consumption. However, its share in terms of supply stands at 10 percent. This is because most European semiconductor companies are fabless. The act is to enhance local production capabilities with the industry becoming more and more important in terms of economic security.

Intel is the first that responded to the European Union’s effort. Last month, Intel announced that it would invest 80 billion euros (US$88 billion) in Europe for 10 years and build a plant in Magdeburg, Germany. According to industry sources, TSMC is expected to follow suit by announcing plant construction in Dresden this coming summer.

By contrast, Samsung Electronics and SK Hynix are unlikely to increase production in Europe in spite of the subsidies. “In the semiconductor industry, production and consumption in the same region have few advantages,” explained a spokesperson for the Korea Institute for Industrial Economics and Trade, adding, “Samsung Electronics already announced 300 trillion won [US$226 billion] investment in South Korea and, as such, expansion in other regions is rather unlikely.”