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Lean on Me: A U.S.–Europe Partnership
March 14, 2022 | Nolan Johnson, I-Connect007Estimated reading time: 3 minutes
The United States is not the only region to feel the sting of losing the bulk of its printed circuit board manufacturing to Asia. European countries, such as France, recognize the dire need to modernize their factories, upskill their labor force, and provide for a more secure supply chain. But what are governments doing to help? In this conversation with Nolan Johnson, IPC Europe’s Alison James breaks down the tremendous potential for a partnership between the U.S. and Europe and what that means for a stronger global industry.
Nolan Johnson: Alison, I’m looking for some insight regarding the European perspective on strategic government investment. How are regions outside the United States handling this same sort of a challenge, compared to the U.S.?
Alison James: I presume you’re looking at the CHIPS for America Act for this context?
Johnson: I believe there are three pieces of legislation that have language for semiconductor development. Of course, IPC is very involved in the conversation, trying to communicate that one can’t just focus on chips. A similar conversation certainly must be going on elsewhere. I keep hearing about the French legislation, for example.
James: It absolutely is. I’ll give you a tiny bit of perspective. The silicon-to-systems approach that we’re taking in Europe is the approach that IPC takes everywhere.
Last week, the European Commission proposed a European CHIPS Act that, in theory, is going in a similar direction as the United States. In Europe, everybody’s still looking at the details of this proposal because it’s a large package. On a really positive note, the EU recognizes in its proposal the importance of advanced packaging.
If you are looking then at a national level you asked specifically about France. The government is very focused on these discussions around strategic autonomy and strategic industries. A couple of years ago, they recognized electronics across the chain with a strategic committee that includes EMS companies and that has engaged printed circuit board companies. As part of their recovery package in 2020, they put money into various areas of technology and, more broadly, into re-industrialization. They aim to bring industries back and modernize them. Some printed circuit board companies have received funds from their recovery package to upgrade production lines amongst other projects. It’s detailed on the government websites but talking to individual companies gives a much clearer idea of the projects concerned.
Now, some of these investments are linked to European funding, but France is relatively unique in looking across the chain. It does get complicated as you need to look at what each company is doing. How much are you involved in microelectronics? Are you engaging in European projects? Second, as we were saying, the European CHIPS Act is not just chips; it’s also advanced packaging. There are a few things going on.
Johnson: So far, we’ve talked about semiconductor fabrication and packaging in Europe. What about board fab and assembly?
James: Well, exactly. What about fabrication and assembly? It’s not the primary focus of the European CHIPS Act. But is there a specific action at the European level specifically around printed circuit boards? No. Europe has the same issue as the United States. We are down to about 4.4% share of global production in Europe, and that’s down from 20–30% in the ‘80s. We’ve continued to go down over the last 20 years. Similar to the United States, it certainly should be prioritized a lot more. It doesn’t get the focus that the chips get by any means.
And that’s something that the industry would obviously like to see across Europe—a medium- to long-term perspective on reinvigorating the industry in Europe. With assembly, they haven’t spelled out something specifically on EMS in any measure. But it’s complicated because Europe is doing quite a lot with modernization of factories, what we would call Factory of the Future with measures around AI and data. Of course, EMS companies want to have access to semiconductor chips, but they would also like to have access and make sure there’s a secure supply of printed circuit boards. It’s a bit disjointed; there isn’t, “Here is a measure, which is dedicated to EMS.” We don’t have that, but Europe does a lot on digitization, Industry 4.0, or Factory of the Future.
To read this entire conversation, which appeared in the March 2022 issue of SMT007 Magazine, click here.
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