Dana Nikolaj
In the realm of modern technology, the importance of semiconductors is paramount. The current situation in the supply chain for semiconductors is pushing manufacturers to reinvest in new locations closer to their customers. The need for specialized services is growing. This brings Europe and dedicated service providers to the table.
Semiconductors are omnipresent. They represent the heart of all digital devices, powering everything from the electronic systems in our smartphones to the digital components in vehicles. Their demand is particularly heightened by the automotive industry’s shift towards electric vehicles. Electric vehicles, unlike their traditional counterparts, rely heavily on electronics for a wide range of functionalities.
Be it battery management, where semiconductors are integral in ensuring that battery cells in EVs are charged and discharged in a properly balanced manner, or their pivotal role in thermal systems, ensuring batteries do not overheat and the interiors remain within the desired temperature range. This is not only necessary to ensure optimal performance but also to extend the lives of these batteries, which are, without a doubt, the most valuable component of an EV. Regarding drive control, motor controllers in EVs, powered by semiconductors, steer the power delivery, majorly influencing factors like acceleration and the overall driving experience. And finally, EVs now come equipped with many advanced safety and navigation features, such as lane-keeping assistance, automated parking, and collision prevention. These functions are all enabled by complex semiconductor systems, which process a vast amount of data in (near) real-time.
As demand for smaller and more efficient chips increases day by day, the need to ensure a robust and sustainable supply chain gains in importance globally and locally. While Asia has been the traditional hub, there is a burgeoning effort within Europe, particularly driven in and by Germany and the EU, to create a resilient chip ecosystem inside Europe. This ambitious plan aims to develop semiconductor manufacturing in Europe from a current 10% to a robust 20% share of the global market by 2030.
The catalyst: global chip shortage
The chip shortage of 2020/2021 significantly impacted many industries, most notably the automotive sector. This crisis underlined the essential nature of an independent and robust supply chain and paved the way for technological investment in Europe. With automation, energy efficiency, and advanced AI becoming more and more a prerequisite for future innovations, semiconductors undoubtedly represent the foundation.
Unique challenges of chip manufacturing
Manufacturing chips are not comparable to traditional production lines. The products are delicate, and even a minuscule particle of dust can jeopardize the functionality of an entire batch of electrical components. This sensitivity, therefore, requires a highly automated and stringently secured production environment, often operating under special conditions such as air-controlled rooms and purpose-built cleaning protocols.
"As demand for smaller and more efficient chips increases day by day, the need to ensure a robust and sustainable supply chain gains in importance globally and locally."
For specialists operating in these environments, the requirements are considerably high. Employees need to be aware that they are dealing with products that must meet the highest requirements in terms of safety, handling, and traceability. This brings with it a lot of responsibility. If, for example, something unforeseen happens in a very early production stage of a component that has a production time of three years, then this has far-reaching consequences. Therefore, in addition to basic work-related skills, additional special education and training is mandatory for employees to be able to operate safely in such production areas. The regulations are very strict.
Outsourcing as a strategic move
Outsourcing has emerged as a well-proven strategic approach in the semiconductor industry. With complex and manifold processes involved in chip manufacturing, companies are increasingly realizing the benefits of letting specialized external companies handle specific segments of their production chain. Alongside topics such as cost efficiency, scalability, and risk management, it is the question of focusing on core competencies for chip designers and manufacturers. By outsourcing certain processes, they can concentrate on their core competencies, be it R&D, design innovation, or market expansion, thereby driving growth more effectively.
Outlook for service specialists
For service experts like Leadec, the upcoming investments driven by the European Chip Act create various opportunities. With global giants like Infineon, Intel, and Globalfoundries investing across Europe, the construction and expansion of fabrication facilities will undoubtedly rise. These projects offer a chance to design outsourcing solutions from the beginning of the endeavor. Here, Leadec offers solutions ranging from automation technology all the way to operations. For more than 60 years, Leadec has been supporting customers with its footprint of over 300 sites globally, often directly at or very close to our customers’ plants and facilities. It has often been shown that it can be a real competitive advantage for our customers to benefit from our experience, not only with existing sites and facilities but also especially with a completely new production facility built on a greenfield site.
Serving the uprising semiconductor industry in Europe represents a new challenge, one that certainly cannot solely rely on standard processes. Manufacturers, as well as service providers, must join forces, be flexible, and learn continuously together. The time is right to do the right things right.
