U.S. Semiconductor Firms Join Forces with Europe to Boost CHIPS

The all-important semiconductor industry is by nature cyclical and rapidly changing. However, it has experienced above-the-norm challenges recently caused by the pandemic, supply-chain issues, disruptive world events, oversupply in certain segments and other concerns. Add to this the generic problems of finding enough qualified tech workers and rounding up the enormous capital required to build fabs –  the chip industry as of mid 2023 is weathering an unprecedented storm.

However, the long-term picture is still far from gloomy. Electronic devices will only experience increasing demand as advancements in AI, IoT, machine learning and other technologies result in new products reaching a growing audience in both the consumer and business sectors. According to Fortune Business Insights, the global semiconductor market is projected to grow from $573.44 billion in 2022 to $1,380.79 billion by 2029, at a CAGR of 12.2 percent in the forecast period (2022-2029). Some other forecasters are more bullish. A 2020 study by the Semiconductor Industry Association (SIA) and the Boston Consulting Group found that global demand for semiconductor manufacturing capacity will increase 56 percent by 2030.

Two CHIPS Acts, one common goal

Some converging trends point to new opportunities for the American semiconductor companies that take specific action. “The semiconductor industry has a long history of investing big during down cycles to be ready for the inevitable rebound in demand,” the SIA has noted. A powerful factor at present is the commitment in both Europe and America to boost domestic production via twin “chips acts” that will see $47 billion (Europe) and roughly $280 billion (U.S.) invested in manufacturing, research and related activities.

Given the longtime collaboration and partnering between these two geographies and their common goal of revitalizing their domestic semiconductor industries, some American chip companies are addressing their future needs by joining forces with EU partners, investing in new manufacturing and product research activities located there. Ireland, in particular, is the choice of a growing number of firms due to the availability of talent, plethora of research centers, business-friendly tax environment and long track record of hosting top U.S. chip companies.

In an industry known for its scarce skilled labor supply, Ireland has a young, well-educated workforce and hiring technology talent can be less challenging than in other countries. In fact, Ireland has the highest level of STEM graduates per capita in the EU among 20 to 29 year olds. This is one of the reasons why many U.S. semiconductor firms have opened research centers in Ireland.

Medical device leader Boston Scientific, now the largest life science employer in Ireland, has operated there for years and has been collaborating with the Microelectronic Circuits Centre Ireland (MCCI), a national technology center that links the eight top Irish research centers that specialize in semiconductor design research. This ASIC IP will be used in implantable medical devices offered by Boston Scientific.

Engineering talent

According to John Morrissey, MCCI executive director, this circuit IP was jointly developed and “[Boston Scientific] licensed it back from MCCI, allowing Boston Scientific to own the IP for follow-on commercialization possibilities.”  Other partnership benefits include reducing company R&D risk, time and costs along with accessing an ecosystem of suppliers. In addition, U.S. companies doing business in Ireland get access to skilled engineering talent. Those firms with ongoing Irish operations “establish a connection that allows access to student PhD graduates – and we produce quite a large number every year. That’s pure raw talent that you can mould and shape to become advanced technology leaders,“ Morrissey said.

In addition, a number of other companies are availing themselves of the opportunities:

• Analog Devices announced May 15th 2023 that it is investing $693.5 million in a new research and development and manufacturing plant in Ireland, as it looks to boost its production capacity in Europe.
• Microchip Technology invested $20 million in a development center based in Cork, Ireland. The center incorporates an engineering lab that supports state-of-the-art innovation but another key element of Microchip’s Irish activities is collaboration with leading universities there on skills development programs.
• Meanwhile, Texas Instruments operates a power management semiconductor engineering R&D facility called the Cork Power Design Center in Cork, Ireland.
• Also having opened R&D centers in Ireland are Qualcomm  – a multimillion-euro investment located in Cork – and onsemi, with two Irish design centers in Limerick and Cork.
•  EDA leader Synopsis has operated a European development center in Dublin for many years while another top EDA supplier, Cadence, has created an R&D Centre of Excellence in Cork that will employ up to 150 multidisciplinary engineers.
•  Ultra-Clean Holdings (UCT), began building a large Advanced Technology Cleaning Centre last year that will support Intel and other semiconductor suppliers with Irish operations. UCT supplies ultra-high-purity cleaning and analytical services for the semiconductor industry.
• As for Intel, it’s been one of the industry’s biggest investors in the EU. It is now expanding its manufacturing facilities in Leixlip, Ireland, for new process technologies and bigger foundry services, bringing its total investment there to more than €30 billion.
• Another kind of investment being seen in the semiconductor arena is joint ventures, such as the alliance between Advanced Micro Devices (AMD) and blockchain software company ConsenSys – which is to have its headquarters in Dublin – that has raised $20.5 million (€18.2 million) and is rolling out a network of decentralized data centers globally. AMD already had two Irish locations – in Cork and Dublin – through its acquisition last year of Xilinx, which helped make AMD a leader in high-performance adaptive computing.

All these activities by American semiconductor companies join a vibrant start-up scene in Ireland that is producing promising new firms that are frequently bought by larger tech companies – often American — for their technologies. For example, Irish-based start-up companies Commergy, Firecomms, GloNav, ChipSensors, Mingoa, Duolog and Redmere have all been acquired in the last six years for over $100 million, with many new Irish firms like Ikon Semiconductor, Decawave, Powervation and Movidius coming in their wake.

Ireland’s many research centers and aligned technical universities produce a steady stream of breakthrough technologies as well as many skilled graduates that feed into the U.S. /Ireland combined semiconductor landscape. The commitment to industry collaboration activities between the spheres of business, government, research and academia result in a fast-moving environment that rewards American firms doing business there with not just tech talent and new potential products but access to a wealth of funding from Ireland and the broader EU itself. This has been a winning combination for the many American semiconductor companies with Irish operations.

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