Electronics

On October 14th, the Dutch government recently released a report on its official website that the EU should avoid “decoupling” from the global semiconductor industry chain while advancing the “ecosystem” of advanced chip manufacturing.

The global supply chain model is a relatively successful and popular business model in the past 30 years, but the new crown epidemic has caused a certain impact on the global supply chain, causing governments around the world to consider moving manufacturing operations closer to their homeland.

The EU has always relied on external chip manufacturing, and its share in the chip supply chain has been declining-from design to manufacturing. The global chip supply shortage that began last year has severely disrupted the businesses of the automotive industry, medical equipment manufacturers, and telecommunications providers in the European Union and other economies.

To this end, the European Union launched the "European Chip Act" in September this year. It plans to establish an "ecosystem" for advanced chip manufacturing to ensure the security of the supply of European chips and develop new markets for breakthrough European technologies.

The EU's move is regarded as an important measure to promote "strategic autonomy", but it also raises concerns about the "decoupling" of EU industries from the global supply chain.

The Dutch government website recently published an article that takes the success of the Dutch company ASML (ASML), a global leader in chip lithography technology, and the success of Dutch chip manufacturers, NXP Semiconductors and Besi, as examples. It is pointed out that “decoupling” from the global industrial chain is a wrong approach.

The article stated that the "European Chip Act" "needs to recognize that the decoupling of the global semiconductor value chain is an illusion." The article stated that an open "ecosystem" that focuses on attracting investment, accelerating innovation and increasing market value is the best in Europe's interests; diversification and interdependence can make the market more resilient and prevent unilateral dependence.

The Netherlands also proposes to establish a mechanism to prevent key strategic acquisitions of chip manufacturers.

At present, the huge acquisition between NVIDIA in the United States and ARM in the United Kingdom has attracted market attention. ARM is a British semiconductor industry giant. The chip architecture designed by the company has been widely adopted and applied. Well-known companies including Apple, Samsung, and Qualcomm are all customers of ARM.

Therefore, if the transaction is passed smoothly, then Nvidia's competitiveness in the chip track will increase. The outside world is worried that once ARM is acquired by Nvidia, Nvidia will curb industry innovation and so on.

According to the latest media reports, the European Commission, the European Union's antitrust regulator, will launch a comprehensive investigation into Nvidia's acquisition of ARM. It is expected to complete the preliminary assessment on October 27 and conduct a more in-depth investigation in the following four months.