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The semiconductor industry in Europe: How to manage the recovery?

The semiconductor industry in Europe: How to manage the recovery?. The main European companies suffered more from the 2009 crisis than their competitors. Main locations of the main companies in Europe. Finland: ST- Ericsson. Netherlands & Belgium: NXP. UK: NXP Freescale Intel.

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The semiconductor industry in Europe: How to manage the recovery?

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  1. The semiconductor industry in Europe: How to manage the recovery?

  2. The main European companies suffered more from the 2009 crisis than their competitors

  3. Main locations of the main companies in Europe Finland: ST- Ericsson Netherlands & Belgium: NXP UK: NXP Freescale Intel Germany- Austria: Infineon Global Foundries NXP X Fab France: ST Micro ST Ericsson NXP Atmel Infineon (Altis) Freescale Italy: ST Micro

  4. These Europeans companies were weakened by their purely financial strategies • The European and Japanese IDMs have been the ones which suffered the most from the crisis (in terms of sales, results and employment - even if the layoffs were equally numerous in the US) • What was missing ? • Strong competitive positions being focused on specific market • Innovative products arriving in time on the market and aligned with the market expectrations (one exception is clearly the Infineon mobile phone chipsets) • Why ? • The European industry faced the crisis while it was engaged in a massive restructuring (NXP, Infineon ,ST). This restructuring was largely initiated by the financial strategies they entered into these past couple of years. The companies were focused on their reorganizations and layoffs, rather than on their markets. They became late on R&D and manufacturing. They were not competitive when the market slowdown.

  5. Recent fab/line closures Dresden: Qimonda Boeblingen: NXP Hambourg: NXP Nimegen: NXP East Killbride: Atmel Freescale Munchen Perlach: Infineon Rennes: ST Toulouse: Freescale Rousset 1: ST Agrate: ST Malta: ST

  6. Will the crisis slow down or accelerate the transformation of the European industry? • The consensus on the European industry seems still centered around 2 or 3 main locations where companies establish clusters with the support of massive public aid programs • Grenoble - Crolles: CEA/LETI and ST Microelectronics, Soitec • Dresden: Global foundries, Infineon, Franhofer Institute ,XFab, Toppan… • Louvain : NXP, IEMC • Even those centers are not immune from plant closures (Qimonda in Dresden) • All the other locations seem to be subject to layoffs and plant closures, from which we already see the rise of a new type of European companies : • They are built around Business plans such as small specialized foundries (mixed signal), as Lfoundry or TSH taking the lead from companies like X Fab • There are Fabless companies (R&D) built around laid off teams. • is there a rise in the number of European fabless • The global cuts in investments, in R&D and the growing outsourcing of R&D towards Asia seems to lead to the emergence of these small local actors.

  7. Recent fab sales/ Fabs for sale Heilbronn: Atmel- TSH Corbeil: Altis Landshut: Renesas- LFoundry Caen: NXP - Ipdia Nantes: Atmel - MHS Vila do Conde: Qimonda -Nanium Rousset: Atmel - LFoundry Catania: Numonyx: Solar Panels

  8. The semiconductor industry is the basis of the whole electronic and traditional industry chain • Semiconductor industry is strategic for Europe. It irrigates products and innovation in key sectors of European economy where the continent has strong positions : • Automotive • Defense and Security • Aerospace • Telecommunications • Energy and Electricity • Transportation • It should be remembered that electronics and integrated circuits are one of the most important components to be used in the regulation of energy consumption with regards to a low carbon economy • We need to insure the survival and the development of the industry in Europe

  9. Will the crisis slow down or accelerate the transformation of the European industry? • Consolidate the European industry around two policies : • 1) Create a European “Champion” ? (ST+ Infineon + NXP ?) . This consolidation would be pushed by the public authorities which would give massive aids to these actors. • Objectives • Keep the know-how and the technologies in Europe and insure their diffusion towards traditional industrial sectors • Drive the R&D towards technologies and products which will be in favour of public and citizen interest (Security, health, environment). Use the synergies to develop not to lay off • Avoid the disasters caused by the excess of the finance (NXP, Freescale..) • 2) Facilitate the emergence and the survival of small actors which need time to strengthen business models around local specialized services. The public aids must be reoriented towards these small companies around clusters and help them to secure their investments • Objectives: • Create an Ecosystem around the main industry players to fuel the technological innovations : • Maintain local industry • Drive Public aids to these local companies

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