PPP is key to increasing capacity in the semiconductor industry

24 Feb 2022

“Interdependence drives success”, said Cristiano R. Amon CEO of Qualcomm during a panel session at the Munich Security Conference (MSC) on 20th February 2022. Speaking of the vital need to grow capacity in the semiconductor industry, Mr Amon stressed the role of Public Private Partnerships (PPP). He was joined by Thierry Breton, EU Commissioner for the Internal Market, in a discussion that focused on the EU’s ambition for ‘autonomy over chips’.

Technology and industrial leadership were hot topics at the MSC 2022. Josep Borrell, High Representative of the EU for Foreign Affairs and Security Policy, set the tone in his opening speech. He talked about the evolving world order and the importance of technology: “It is no exaggeration to say that who sets the rules, will rule the world.”

Introducing the panel session, moderator Ngaire Woods, Dean of the Blavatnik School of Government, Oxford University asked: If Europe needs autonomy over chips, what does that look like? How does it get there and is it feasible? And if Europe is entering a new era of industrial policy, how does it avoid large, inefficient companies benefitting from government resources?

Public and private investment in Europe

In his replies, Thierry Breton spoke about the European Chips Act, and the needs for skills and resources. He reiterated that Europe is an open continent, but it needs to protect its interests. In this context, he noted that governments worldwide are putting public money into semiconductors. And he predicted that the EU’s 43-billion-euro public investment would generate a further 250 billion euros from the private sector over the next 10 years.

Crucial role of PPP and ecosystems worldwide

Cristiano Amon began his remarks by pointing out that semiconductors are essential for the digital transformation. Thus, the crucial issue is new capacity to meet growing demand, including for leading edge nodes.

“The bottom line is we need more capacity, more talent, and R&D ecosystems, and not only in Asia. The US and Europe can play a very important role,” he said. He applauded governments in developing the necessary industrial policy and the US and EU for launching their respective Chips Acts. And he stressed that PPPs are key to generating the huge investments required.

The essential ingredients for long term success

Why not build a geographically diversified semiconductor industry and a healthy ecosystem? asked Mr Amon. He said that the market will continue to evolve based on innovation and competition. But it’s important to think of semiconductors as critical technology, particularly in areas such as 5G and AI, he continued.

Investment in capacity on a very large scale is essential for these critical technologies of the future, along with an ecosystem, a talent pool and R&D centres around it, he continued. And industry policy in PPP is the way to get that done because capacity-building is capital intensive and requires investment for decades to come. It is not a short-term activity.

In closing, Mr Amon added that he sees the US and EU Chips Acts as very complementary. The goals are not about replacing what exists today, but about creating a lot more capacity, he remarked. It’s a global need that no one country can solve alone.

“We are in a global, interconnected economy. Technology is global. Having partnerships, having interdependence is one of the things that drives success. So, coordination and governments investing in growth and R&D is the recipe for success.”

This was a point that Mr Amon reiterated in a tweet after the conference. “As the #DigitalTransformation of industries accelerates, we need a robust #semiconductors ecosystem with strong industrial policies to drive competition and innovation.”


See the video of the MSC panel session here: https://media.securityconference.org/strategiccircuitbreakers