ICT Man - Exploring the potential of ICT Components and Systems Manufacturing in Europe ICT Man Final Meeting 13/04/2011, Bruxelles CEA- LETI, Hughes Metras, Brice Tavel 1
Context of the study The ICT MAN Study, launched in January 2010, aims at investigating the potential of ICT1 components and systems manufacturing in Europe and thus to contribute to the EU decision making process regarding the future orientation and structuring of European ICT components and systems research in the last stages of the Framework Programme 7 and its successor programme. The study covered 5 objectives: 1. Overview of today s European electronics manufacturing landscape 2. Impact of SEA initiative and provision of recommendations 3. Assessment of deployment potential and feasibility of OLAE2 4. Assessment of the environmental and health impact of large-scale OLAE manufacturing and use in Europe 5. Assessment of current R&D investment and tracks for future actions CEA- LETI, Hughes Metras, Brice Tavel 2
Planning & Methodology Study Setup Report Desk Research Report Interviews Report + Workshop Study Material Interview Partners Desk Research & Interview Parameters Quality check procedure Inception Report Objectives 1: Study Material 2: Focus on Interviews 3: Study Material 4: Study Material 5: Study Material Interim Study Report Objectives 1: 20 Interviews 2: 10-15 Interviews 3 + 4: 20 Interviews 5: 5 Interviews, Focus on Desk Research Draft Final Study Report Final Study Report Workshop presentaiton CEA- LETI, Hughes Metras, Brice Tavel 3
Objectives of the Study The study covers 5 objectives : Overview of today s European electronics manufacturing landscape Impact of SEA (Semiconductor equipment Assessment) initiative and provision of recommendations Assessment of deployment potential and feasibility of OLAE Assessment of the environmental and health impact of large-scale OLAE manufacturing and use in Europe Assessment of current R&D investment and recommendation for future actions CEA- LETI, Hughes Metras, Brice Tavel 4
Economical Data Data Processing Communications Global electronic market supply chain revenue Systems 2008 ~1430B$ 2009 ~1380B$ 2010 ~1440B$ Devices 2008 ~275B$ 2009 ~250B$ 2010 ~280B$ Equipment Industrial and Medical 2008 2009 2010 ~31B$ ~17B$ ~26B$ Consumer Material ~20B$ Automotive Source: Gartner, Ic Insights (2008-2009) Military and Civil Aerospace, Security CEA- LETI, Hughes Metras, Brice Tavel 5
High market share of Europe European semiconductor market share (%) European market share in the world by application Low market share of Europe W orldwide market size (B$) 107 30 Automotive 5 13 23 0. 42.6 25 Industrial/Medical 20 Communication 15 Consumer 10 Space/Military /Security Data Processing/ Computer 5 0 0 source: Gartner Dataquest (12-2008) 2 4 6 8 10 Worldwide semiconductor market CAGR Low worldwide 2007-2012 (%) High worldwide market growth market growth The table shows a strong correlation between excellence in device manufacturing and system manufacturing CEA- LETI, Hughes Metras, Brice Tavel 6
Worlwide ranking of semiconductors IDMs 1980, 1999, 2000, 2009, 2010 Rank 1980 1980 1990 2000 2010 Compagnie Rank 1990 Compagnie Rank 2000 Compagnie Rank 2009 Compagnie 1 Texas Instruments 1 NEC 1 Intel 1 Intel 2 3 4 5 Motorola Philips NEC National Semi. 2 3 4 5 6 Toshiba Motorola Hitachi Intel Fujitsu 2 3 4 5 6 Toshiba NEC Samsung Electronics Texas Instruments STMicroelectronics 2 3 4 5 6 Samsung Toshiba Texas Instruments Renesas Elec. (incl.nec) Hynix 6 Toshiba 7 Texas Instruments 7 Motorola 7 STMicroelectronics 7 Hitachi 8 Mitsubishi 8 Hitachi 8 Micron (incl. Numonyx) 8 Intel 9 Philips 9 Infineon 9 QUALCOMM 10 Siemens 10 Matsushita 10 Micron 10 Infineon Others Others Others Others 12 Philips 17 NXP Source: Gartner Dataquest Europe has been successful in keeping world leaders until the early 2000 s. One of the proposed model based on reducing manufacturing activities seems challenging to retain leadership CEA- LETI, Hughes Metras, Brice Tavel 7
Fabless companies by region source: Global Semiconductor Alliance (2009) Lack of fabless in Europe compared to America and Asia. No European fabless in the top 10 fabless. CEA- LETI, Hughes Metras, Brice Tavel 8
Worldwide advanced semiconductor manufacturing (and planned) Intel Intel Intel US: 1 planned IBM Intel Europe: 1 planned ST Global Foundries Intel Samsung Asia/Pac: 20 planned Japan: 1 planned Panasonic TSMC Existing 300mm industrial line with potential for 22nm Number of planned 300mm fabs (all nodes) source: Gartner Dataquest (12-2008) CEA- LETI, Hughes Metras, Brice Tavel 9
2010 Semiconductor production sites in Europe 2010 - Production sites > 25,000 wspm 200mm eq. Ev ol ut i on de l a pr oduc t i on 1 8 0 0 de se mi - c onduc t e ur s e n Eur ope 1 6 0 0 ( k wspm é q 2 0 0 ) 1 4 0 0 1 2 0 0 <100mm 100/125/150 200mm 300mm 300mm RTO pilot line Greenock East Kilbride Leixlip Glenrothes Newton Aycliffe North Tyneside Limerick Oldham Stockport, Cheshire Chippenham Lincoln Stadskanaal Itzehoe Swindon Newport Bar Hill Hamburg Cricklade Bedford Nijmegen Plymouth Oudenaarde Duisburg Erfurt Caen Alsdorf Dresden Corbeil Mainz Nuremberg Nantes Heilbronn Regensburg Tours Reutlingen Landshut Freiburg Piestany Grenoble Marin Lenzburg Freising Unterpremstätten Zarnovica Agrate Toulouse Borgaro Torinese Turin Villach Genoa Rousset Sermoneta Avezzano Roznov Vilnius Bucharest Roznov 1 0 0 0 Kiev 8 0 0 6 0 0 4 0 0 2 0 0 0 19 8 0 19 8 5 19 9 0 19 9 5 2 0 0 0 2 0 0 5 2 0 10 Σ 1,453,679 wspm 200mm eq. Zelenograd Moscow Weight of semiconductors production sites with respect to total semiconductor production in Europe CEA- LETI, Hughes Metras, Brice Tavel 10 Catane sources: Gartner and CEA -3 sites with 300mm production facilities for advanced CMOS and More Moore applications (red) - About 20 sites with 200mm productions facilities relevant for More than Moore applications (yellow)
Three main topics emerged from the desk research Applications markets Semiconductor company profiles Manufacturing ressources A basis to challenge the interviewed actors Interview phase CEA- LETI, Hughes Metras, Brice Tavel 11
Interviewed stakeholders for objective 1 CEA- LETI, Hughes Metras, Brice Tavel 12
Interview analysis Applications markets Semiconductor company profiles Manufacturing ressources Final clients needs (OEMs) A basis to challenge the interviewed actors Strategic partnerships and ecosystems Interview phase Analysis of interviews were grouped in four main topics Sector organisation Entrepreneurship CEA- LETI, Hughes Metras, Brice Tavel 13
Final clients needs (OEMs) Strategic partnerships and ecosystems Sector organisation Entrepreneurship OEMs have real motivations to go outside of Europe: Cost reduction of products design and assembly Labour costs (for assembly) Operating costs Cost of products developments Low transportation costs and the carbon footprint costs is not taking into account Supply chain concerns: Availability of components Volume Location of assembly factories Proximity of suppliers Despite this, OEMs major concern is to secure the sourcing of components. Sourcing risks can be: Counterfeiting particularly with Asia Obsolescence Availability Quality OEMs would find strong advantages to source in Europe but the current CEA- LETI, Hughes Metras, Brice European Tavel 14 industrial context is not favorable
Final clients needs (OEMs) Strategic partnerships and ecosystems Sector organisation Entrepreneurship The virtuous circle of strong collaborations between suppliers and clients Ex: OEM/IDM on emergent markets like Automotive and IMS - Regional collaborations give competitive advantage First components that fits OEMs requirements Exemples of world class IDMs on Automotive and IMS* components Device/chips Semiconductor Manufacturer Component integration Electronic Contract Manufacturer (ECM)* System/ Product Original Equipment Manufacturer (OEM) Exemples of world class OEMs on Automotive and IMS* markets * IMS: Industrial and Medical Systems OEMs requirements to obtain specific innovations CEA- LETI, Hughes Metras, Brice Tavel 15
Final clients needs (OEMs) Strategic partnerships and ecosystems Sector organisation Entrepreneurship Advanced CMOS clusters (More Moore) drives technologies They also include More than Moore actors (ST, Infineon, NXP) Magnet effect CEA- LETI, Hughes Metras, Brice Tavel 16
Final clients needs (OEMs) Strategic partnerships and ecosystems Sector organisation Entrepreneurship Manufacturing Labor costs not a criteria for semiconductor, initial subsidies are making the difference: Need for money (VC, bank, state) to support first manufacturing investments More Moore: still few actors in Europe. Need for Pilot lines seen as a back up to keep control of advanced technology More than Moore: strong actors, with 200mm facilities that address emerging markets. Need for Pilot lines to accelerate smart systems development. Need for volume manufacturing to avoid technology transfer out of Europe The Fabless business model Few fabless in Europe compared to RoW: Need for more Fabless start-up in Europe The design costs and the development time of new chips are no more in line with VC s expectations: Need to support R&D and growth Proximity to Foundries: Need for regional and intermediate size foundries to support small fabless Fabless business model may not compete with IDM one Both models are needed. Whatever the model (IDM or fabless), the loss of manufacturing in Europe CEA- LETI, Hughes Metras, Brice Tavel 17 will lead to the loss of R&D
Final clients needs (OEMs) Strategic partnerships and ecosystems Sector organisation Entrepreneurship There is a lack of entrepreneurship and manufacturing mindset in Europe. A clear message is expected from authorities. Entrepreneurship and manufacturing must be shown as pillars of future successes. Europe is not creating enough start-ups on emerging markets compared to America or Asia. Public initiative and support is needed for start-up creation and growth. SMEs are often limited to their domestic markets. A European SBA can be a way to involve champions in the growth of SMEs. CEA- LETI, Hughes Metras, Brice Tavel 18
Summary of recommandations Market driven proposition Proposition to support the innovation chain Proposition for European competitiveness - A European Small Business Act associated with public procurements to secure SMEs or start-up markets - «Smart incentives» mechanisms to create market and generate business in the value chain - SEA-like program to secure the development of industrial tools - Pilot line and volume manufacturing to secure the transformation of ideas into products - Mechanisms for start-up creation (fabless or not) and the growth of SMEs - SEA like program to reinforce the innovation chain and support the equipment supplier ecosystem - Fundings of initial investment for manufacturing facilities to compete with similar rules as Asia or US. - «Smart subsidies» for product developments to develop in-land manufacturing and render it attractive - Deliver to Europeans some strong and positive messages regarding European priorities and competitiveness CEA- LETI, Hughes Metras, Brice Tavel 19
CEA- LETI, Hughes Metras, Brice Tavel 20 Thank you for your attention!