IndustriAll Europe discussed the situation of the European semiconductor industry at a seminar today with trade union delegates, experts and representatives of the European Commission.

Industrial production, and therefore industrial jobs, have become dependent on digital technology. Semiconductors, also known as "chips", are the building blocks of digital technology and essential for today's industrial production. They are used in a wide range of electronic devices, from smartphones, computers and televisions to cars, medical equipment and industrial machinery. The EU is largely dependent on chip imports, with a current market share of 9%, having lost its position of 44% market share in 1990. Production is mainly concentrated in Asia: Taiwan, South Korea, Japan and China. The US has a significant advantage in high-end chips and dominates design. At present, the EU is clearly lagging behind. 

The COVID-19 pandemic has severely disrupted global semiconductor supply chains. This has led to critical shortages and production slowdowns in various industries, exposing the fragility of the supply chain and Europe's dependence on a strategic commodity. Given its strategic importance for security, competitiveness and technological leadership, the semiconductor sector has become a geopolitical battleground. The US and China, for example, are involved in several trade disputes related to semiconductor technology. 

The European Union has decided to boost domestic chip production through the European Chips Act and aims to double its current global market share to 20% by 2030. As the EU enters the race to catch up, industriAll Europe examines the state, prospects and challenges of chip manufacturing in Europe with a view to formulating a trade union response in the coming months.

Key questions to be addressed include:

  • Strategic autonomy vs. cooperation - what is the way forward? The semiconductor supply chain is highly globalised, long and complex. No single country dominates at every stage of the value chain. How damaging are protectionist policies?
  • Is the EU effort sufficient given the semiconductor strategies of other countries? Is the EU strategy of prioritising high-end chips the right strategy for the EU?
  • What is the role of the EU when Member States pursue national industrial and investment policies? Is there a risk of Member States outspending each other?
  • How can we ensure that public investment is monitored and well spent? Including EU funds spent on implementing the Chips Act.
  • What is at stake for workers as the EU starts to catch up?
  • Are there enough skills in Europe, is there sufficient anticipation of skills needs and are training strategies in place?
  • Will the EU Chips Act promote quality jobs in Europe and benefit all EU regions equally? At present, we are highly critical of the lack of social conditionality in the legislation. The provision of public funds to companies must be conditional on the protection of workers' rights, social dialogue and quality jobs.

Deputy General Secretary Isabelle Barthès said:

"The semiconductor industry is undoubtedly a strategic industry for Europe. Workers and their trade unions must be actively involved as the EU and Member States prepare to boost this industry and implement the EU's chip legislation.

"As trade unions, we must ensure at European and national level that the money invested benefits workers and all regions.

"We also need to weigh carefully the notions of strategic autonomy and strategic interdependence. At this stage we cannot be clear about what will be the most sustainable solution. The debate has only just begun but the fate of industry depends on it.”