Microelectronics

ZVEI: Study shows that semiconductor production pays off economically

December 4, 2024. Subsidies for the semiconductor industry are a worthwhile investment for the state. This is one of the findings of the new ZVEI study “From chips to opportunities: the importance and profitability of microelectronics funding”. “The funds invested in microelectronics generate a high return,” explains study author Tanjeff Schadt, Partner at Strategy&, PwC’s global strategy consultancy. The return is between 30 and 40 percent, and the money invested is amortized after nine to twelve years. As a result of the promotion of microelectronics, the annual gross value added in Europe has increased by 33 billion euros and tax revenues have risen by 7.9 billion euros per year. In addition, 65,000 new, qualified jobs would be created in Europe, 49,000 of them in Germany alone.

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“The figures clearly show that the investment pays off and creates the basis for Europe’s competitiveness and innovative strength. We are seeing economic growth and job creation across the entire value chain,” summarizes Schadt. “Every direct job creates around six additional jobs along the value chain, not including jobs that are created in neighboring industries due to increased competitiveness.”

Despite these positive effects, Germany and Europe need to do more for the microelectronics industry. The study states unequivocally that the European Union’s 20 percent target for global semiconductor capacity by 2030 cannot be achieved. Even with the subsidies currently provided, the share would fall from 8.1 percent at present to 5.9 percent in 2045. “If production capacities continue to decline, Europe risks being left behind and becoming a pawn in the game of geopolitical power interests,” warns ZVEI President Dr. Gunther Kegel. Because the microelectronics industry is crucial for Europe’s competitiveness and technological sovereignty, the EU must step up its commitment. Kegel: “The current funding commitments can only be a first step, they must be expanded.” Europe only still has a strong market position in the areas of power semiconductors, microcontrollers and sensor technology, the ZVEI President continued, demanding: “In order to secure our position in the global value chains, funding should focus on existing strengths in the future. Europe needs its own technological foothold that cannot be ignored internationally.”

It is also important to extend funding to the microelectronics ecosystem. Kegel: “We cannot allow our market share in printed circuit boards and electronics production to shrink any further.” Unlike in the USA, for example, there is no funding for either industry in the EU. The EU’s share of the global PCB market has historically shrunk significantly and is well below five percent. 85 to 90 percent of the global production volume is manufactured in China and Taiwan.

Chips: key technology for achieving climate targets

The study also highlights the contribution that microelectronics makes to reducing CO2 emissions. “Semiconductors help to save many times the emissions that occur during their production,” explains Andreas Urschitz. The ZVEI and Infineon board member sees great opportunities in developing Europe into a pioneer of climate technologies. “Whether photovoltaics, wind power, heat pumps, storage or emission-free mobility: the demand for climate-friendly technologies will increase rapidly,” Urschitz continues. “The intended climate-neutral transformation of the economy and society will only succeed with microelectronics. Semiconductors enable innovation, productivity progress and thus the competitiveness of future-oriented industrial sectors, such as the automotive sector, renewable energies and grids, industrial automation and many more.”

According to the study, power semiconductors account for the largest share of the semiconductor demand required to achieve the climate targets – 80 percent. This is because they are needed almost everywhere for control and optimization. In order to achieve the self-imposed goal of climate neutrality by 2050, up to 25 percent of the anticipated European production capacities could be required for climate-neutral electrification alone, the study also shows.

In order to be able to address the resulting needs of microelectronics even better in the future, the ZVEI has created the new Microelectronics Platform. It is intended to bring together the relevant stakeholders and pool the concerns of the industry. The platform will be chaired by Andreas Urschitz.

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Further links

👉 www.zvei.org 
👉 Study “From Chips to Opportunities – The Importance and Economics of Microelectronics Promotion”
👉 Press conference of the ZVEI

Photo: Unsplash

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