The demand for advanced chips is only going to increase as our reliance on modern devices increases. The world is already witnessing a severe global shortage of ships. The impact is felt by a wide variety of industries. Even car manufacturers are having to delay their vehicles because they can’t secure enough chips.
There are only a handful of companies that dominate the supply landscape. Samsung happens to be one of them. As an influential part of the supply chain, it’s always called upon to provide guidance and support.
EU to provide multi-billion Euro incentives
The US government under President Biden is embarking on an ambitious plan to make the country one of the leaders in chip production. Samsung was recently invited to a White House discussion on ways to address the ongoing shortage. The company is also close to finalizing a $17 billion investment to build a new chip plant in the country.
Much of the advanced chip manufacturing is carried out in Asia and to some extent in the US. The European Union finds itself on the outside and it wants to change that. There are concerns that the EU may have made itself too reliant on non-EU producers. The European Commission recently announced that it wants the bloc to double its production capacity. It wants to account for 20% of the global chip production by the end of this decade.
The Commission wants major chip manufacturers to set up new plants in the bloc. Thierry Breton, EU Commissioner for the Internal Market, told Germany’s Frankfurter Allgemeine Zeitung that there’s a need for the EU to make its chip supply chains resilient. He pointed out that Europe is specifically interested in adding capacity for the production of highly advanced 5, 3 and 2-nanometer chips. To achieve this objective, the EU might offer aid to major chip companies in the “double-digit billion Euro range.”
The idea is to incentivize these companies to set up their new manufacturing plants in the EU. Breton is already expected to meet with executives from Intel and TSMC later this week. Talks with Samsung are also planned.
Samsung already views the chip business as a major driver for future growth. It’s likely going to listen to any proposals that the EU may have with genuine interest. If the numbers end up making sense, a Samsung chip plant on the continent may not be a distant reality.