–
Advanced chip technology is at the heart of the economic and technological power struggle between China and the US. The superpowers are increasingly beckoning to the Leuven research institute Imec.
–
‘The historic Belgian city of Leuven is known for its centuries-old university and as the headquarters of the beer giant AB InBev. Less well known is that it also houses a research center for semiconductors, which today is the focus of politics and industry.’ This is how a begins items in which the news agency Bloomberg describes how our country is on the frontline of the technological conflict between the US and China.
–
The essence
- The Leuven research institute Imec is increasingly in the spotlight as a strategically important player in the chip industry.
- The US and China are both eyeing Europe as ally in the technology war.
- Imec faces the difficult task of remaining politically neutral and technologically relevant.
–
–
In recent years, Imec has rarely been in the spotlight of the international press and politics, and they were fine with that in Leuven. The institute has a philosophy of open innovation: through Imec, the major chip giants can share part of their costs for research and testing of the next generations of semiconductors and agree standards together. In that model, Imec itself must remain strictly neutral. ‘The Switzerland of the chip sector’, is how CEO Luc van den Hove described Imec in an interview.
–
Can Imec still guarantee that neutrality now that the sector is being divided more along geopolitical lines? Chips and advanced electronics have become a spearhead in the economic power conflict between the US and China in recent years. Both superpowers have come to realize that the chip industry is crucial to remain at the forefront economically and militarily, but that they really only have limited control over it.
–
ASML
The US and China have come to realize that the chip industry is crucial to remain at the forefront economically and militarily, but that they actually have limited control over it.
–
The two countries have powerful tech companies in software and data, but the suppliers of those tech giants are often located in third countries. For the most advanced chips, for example to build systems with artificial intelligence, they have to be at companies such as Taiwanese TSMC and South Korean Samsung. The very expensive machines to make those chips are sold by the Dutch ASML, a former subsidiary of Philips in Eindhoven. The groundbreaking research into new chips takes place in Leuven.
–
Both Washington and Beijing are trying to get a better grip on its strategic supply lines. The chip shortage as a result of the corona crisis has made those plans even more urgent. Both countries are investing heavily in developing their own chip industry and are trying to get important players such as Imec on their side. In the battle for technological hegemony, Europe is pretty much in the middle of the bed.
–
The Imec tower, in the green southern edge of Leuven, has already received a procession of foreign delegations in recent years. Among others, the Chinese Prime Minister, the Japanese Minister of Innovation and, more recently, a ministerial delegation from South Korea came to visit. The White House made an overview of the most important players in the industry in which it names imec in the same breath as ASML. Pat Gelsinger, the CEO of the American chip giant Intel, also spoke about ‘the two jewels of Europe’ in a recent interview.
–
Provincial City
In the meantime, European top politicians have woken up and discovered the provincial town, which is barely 15 kilometers from the Berlaymont building. The European Commissioner for the Internal Market, Thierry Breton, used imec last month as the backdrop for his campaign to put Europe back on the map in the chip sector. The old continent was once a leading semiconductor producer, with companies such as STMicroElectronics and Germany’s Infineon, but in the past two decades the focus has shifted to Asia. Breton is now aiming for a doubling of the European world market share to 20 percent.
–
With Joe Biden in the White House, the European and American agendas seem to be moving closer together. A deal may be signed in which the Americans co-invest in European chip factories, and the Europeans guarantee them access to strategic research. In this way, the allies would become less dependent on producers in the Chinese sphere of influence.
–
It is probably no coincidence that a few weeks ago Gelsinger floated balloons about a billion-dollar investment in new European chip factories, with the friendly request to provide a few billion in subsidies. The Benelux, although not the cheapest production location on the continent, was also mentioned as a possible location.
–
Battlefield
There is a veritable explosion of new chip companies in China. That is a problem for Intel, which is in danger of losing a large market.
Pascal Coppens
Chinaspecialist nexxworks
–
–
–
China expert Pascal Coppens (nexxworks) is not surprised. ‘There is a real explosion of new chip companies in China. That is a problem for Intel, which is in danger of losing a large market. So it makes sense that they come to the US and Europe to fish for subsidies.’ But the Chinese are also not indifferent. A consortium of Chinese companies recently took over the UK’s largest chip factory through the Dutch company Nexperia, raising alarm bells with the Johnson government. ‘Europe seems to become the battlefield between China and America’, says Coppens.
–
In this geopolitical turmoil, it will be important for Imec to safeguard its relevance and neutrality as much as possible. Leuven’s research into nanoscale electronics is eating up ever larger budgets, most of which come from chip companies around the world. That money will only continue to flow if Imec can continue to provide services that no other parties are capable of.
–
–
