Europe was naive to outsource so much of its semiconductor design and manufacturing in recent decades, a top government official said ahead of unveiling more details around plans to double the region's chip production by 2030.
European Industry Commissioner Thierry Breton said it was possible to redress the imbalance, and the global chip shortage hitting automakers and electronics suppliers was evidence that now is the time to act.
"We want to come back to our former market share of production for the needs of our industry," said Breton, the former CEO of French IT giant Atos and France Telecom.
Europe's share of semiconductor manufacturing has dropped over the years because the region has been "too naive, too open," he said in an interview with Bloomberg.
On Wednesday, the European Commission, the bloc's executive body, will unveil more details about a strategy announced in March to double production to at least 20 percent of the world's chips by 2030. It will involve creating an industry alliance of Europe's leading semiconductor companies and research centers as well as more than a dozen EU governments, Breton said. At least 22 countries have already signed a letter of intent.
The alliance of European players will have to decide how to boost the design and production of 20-nanometer to 10-nanometer chips, which are smaller and more powerful than most currently manufactured in Europe, Breton said, without offering a timeline. Advances in manufacturing are measured in nanometers, or billionths of a meter, with smaller and smaller transistors crammed onto silicon wafers with each new iteration.
In parallel, the EU will work on plans to produce the next generation of leading-edge chips by 2030. Officials are targeting production below 5-nanometers down to 2-nanometers, an ambitious goal not yet reached by industry leaders Taiwan Semiconductor Manufacturing and South Korea's Samsung Electronics.
For years, Europe accounted for a major chunk of global semiconductor manufacturing. In 1990, capacity reached about 44 percent but it's now closer to 10 percent.
Taiwan, South Korea and Japan account for about 60 percent of production, according to Boston Consulting Group and the Semiconductor Industry Association.
European chip designers including NXP Semiconductors and Infineon Technologies now outsource most production to TSMC and other foundry operators.
Europe's decline in consumer technology, such as the failure of Nokia and Ericsson's once-popular mobile phones, is partly to blame for the supply chain shift, according to Jan-Peter Kleinhans, head of technology and geopolitics at think tank Stiftung Neue Verantwortung.