European chipmakers expressed concern about the trend towards the isolation of national production

Some prerequisites for the abandonment of globalization in matters of chip production were formed by the pandemic; the aggravation of geopolitical contradictions added arguments in favor of this trend, but this does not mean that market players are happy with this. Representatives of the European semiconductor industry said that the emerging trend creates obstacles to business development.

Image source: Tokyo Electron

The heads of major European chip manufacturers appeared at the Electronica & SEMICON Europa event in Munich, expressing their concern about the desire of the authorities of many macro-regions to provide themselves with their own chip production plants. Infineon CEO Jochen Hanebeck explained that the fragmentation of chip supplies by geography is accelerating, and if higher customs tariffs are introduced in light of Donald Trump’s victory in the US election, the situation will only get worse.

At this event, the head of Infineon was accompanied by the heads of STMicroelectronics and NXP, which are also large European chip manufacturers. All three companies are now making good money in the Chinese market because they supply electronic components for vehicles there. In many other regions of the planet, the chip market is in decline, except for the rapidly growing segment of artificial intelligence systems.

STMicroelectronics CEO Jean-Marc Chery explained that creating independent supply chains for China and the West requires high costs both in terms of materials and engineering resources. NXP Semiconductors CEO Kurt Sievers added that no country in the world will be able to take a leading position in the global chip market or gain complete independence from the rest. “Even if this were possible, no consumer would be able to afford to buy a device containing such chips,” a company representative explained. He also expressed hope that governments of all countries will eventually realize this truth.