This is a written version of Invest in Pomerania podcast Business Un-tied, starring Laith Altimime from SEMI Europe and Mikolaj Trunin from Invest in Pomerania. The host of the show is Radoslaw Mlynarczyk and he focuses on the reshaping of the semiconductor industry in the coming years.
Podcast is available on Spotify (https://open.spotify.com/episode/6QSzGmorgt5aT085AotC7W) and YouTube (https://www.youtube.com/watch?v=CqysMhGVyi0&list=PLObsqZ2EHZxFEoZIrjXZuTF95K7Lmxx70).
Radosław Mlynarczyk
We have to assume, Laith, that not everyone knows, especially in Poland, what actually semiconductors are, but we won’t dive into the technical details of the chips construction. At the same time not everyone is aware about the existence of SEMI and what does it do, so, if you could please tell just a little about the organization itself.
Laith Altimime
With pleasure. I think since COVID-19, semiconductors have become one of the most popular industries. The digital transformation has been put on a really fast track, the chips are the heart of all advanced devices, which means the industry, not to fall through again, has to rise up to the challanges. Therefore, the expectation is that the industry will double to 1 trillion by 2030. If you can put that into a scope, it has taken 70 years for the industry to reach $600 billion today.
The great opportunity for SEMI is that it covers the entire value chain, from research and development to materials, equipment, manufacturing, design, all the way up to the system level. Automotive, mobile devices, centres, and the giant tech companies like Google, Apple, Microsoft – they all wouldn’t exist without semiconductors.
We exist in seven regions: America – US, Europe, China, Taiwan, Korea, Southeast Asia, and Japan. I have the honor and the pleasure to be the President of SEMI Europe. As an industry association, we have over 3,500 member companies worldwide. And they go in size from a university all the way up to big companies like VW Group, Google, and so on. The most instrumental value that SEMI offers is that it provides the platform to connect across the entire layers of the value chain, because in order to keep up with the industry’s exponential growth, each one of our members needs to accelerate their business. I hope that paints some picture of the SEMI and the importance the semiconductor industry.
Radoslaw Mlynarczyk
Well, it certainly does. But, Mikolaj, we have been a member of SEMI for more than a year now. What were our actions together? And why did we join SEMI at first?
Mikolaj Trunin
Every company, which is important for the semicon industry, is a member of SEMI. SEMI organizes a lot of different events, that are a fantastic opportunity for us to promote Pomerania, to promote our region as a place for future investments for the semicon companies. That was the prime reason. And what we have done in the last year? We’ve been active, of course. We’ve participated in different events globally, ranging from SEMICON West, then SEMICON Taiwan – were part of a Polish pavilion; then SEMICON Europe, where we had our own regional stand, and that we will continue in the future, SEMICON Japan. And then at the beginning of this year, we were also a partner of ISS in Vienna, so Industry Strategy Symposium. Such an active participation is already paying off as we’re currentlyn closing on a certain semiconductors project, which hopefully will be ready to announce soon.
Radoslaw Mlynarczyk
So many opportunities to just show our faces around the people that are in the industry or have been in the industry for ages. Can we get back to you, Laith? How open is SEMI for IPAs – Investment Promotion Agencies, how willing are you to include the regions in promoting the semiconductors industry?
Laith Altimime
Very open in a simple answer, particularly outside the US. Within the US there are regulations that have to berespected, but outside the US, on all other six regions, super open. The important thing is that the industry is really government-led. It can be seen via the Chips Acts, US Chips Act, European Chips Act, Japan Chips Act, China Chips Act, Taiwan Chips Act, Korea Chips Act. The one key element connecting those Chips Acts is the elevation of the importance of a global collaboration. You need to collaborate with the government, policymakers, industry, academia, at all levels, across all regions.
I think that, as Mikolaj said, the model we have established with Invest in Pomerania, in a really short period of time, is outstanding. We have made tremendous progress. But we keep in mind that it’s not just Pomerania, but it’s Poland in general. When we talk about investments, we talk about Poland and how Poland is ready for it all.
Radoslaw Mlynarczyk
That’s great that you mentioned what is happening nowadays. What are the current trends in the global semiconductor market? Obviously, we have been witnessing a huge shift throughout the recent years. You mentioned yourself that it took 70 years for the industry to build up to 600 billion. Now we are targeting another 400 in less than six years, right?
Laith Altimime
Five, six years. Yes, indeed.
Radoslaw Mlynarczyk
Where are we going? What is happening now on the semiconductor market?
Laith Altimime
I think that previously, up until, the smartphone appeared, it was always one megatrend. It was the computing, then it was the internet, and then the mobile phone. There was always one application, one megatrend driving the development of technology. Now, with the acceleration of digital transformation, with everything underpinned by AI, we’re facing the data explosion. More and more devices are connected with each other: autonomous vehicles, smart cities, individual private systems generate zetabytes of data. The infrastructure to process this data is of a crucial importance. One example, you’re transferring from the cloud to edge computing, let’s say for automotive, in order to be able to process that amount of data and the speed it’s required for the car to make the right decision, you really need an accurate compute power. AI comes as a tremendous opportunity to drive the growth of semiconductor industry.
One other crucial thing is power, the energy needed to take the industry above the 700 billion, which is set to happen by 2027. The new generation focuses on the environmental impact of the industry. Only by collectively and collaboratively working together to reduce this impact we can change the side effect of a dynamic growth.
Radoslaw Mlynarczyk
It is of the biggest significance that the industry will change in the coming years. It’s a chance for Europe because the industry was focused on the Asian countries, right? Taiwan, Japan, Korea, China as well. But, Mikolaj, before we dive into Polish perspectives, what is Europe hoping to gain from this current changes in the semiconductor industry? We have only 12 or 10% of global market.
Mikolaj Trunin
The target is 20% by 2030, right?
Radoslaw Mlynarczyk
Yeah, that’s the EU Chips Act.
Mikolaj Trunin
That’s right. It is definitely one specific target. I don’t know, Laith, if you would you agree with me, but I don’t think that as a region we will ever be independent from global supply chain. It’s a matter of different technologies that are being developed. Still, Taiwan is number one, and probably for years will be when it comes to all the cutting edge technologies, like two nanometres technology. I don’t know if there is a chance in the next couple of decades to have it developed in Europe.
Radoslaw Mlynarczyk
Unless we just borrow it from our Asian friends, I don’t think that it is possible.
Mikolaj Trunin
Just giving the bigger picture, I don’t think that we’ll ever be independent from global markets and other markets, like the US. Talking about Europe, this 20%, that will be, I think, quite substantial growth if it’s possible to achieve and maybe to become independent in these technologies that can build on synergies with, for example, carmakers, in the automotive industry.
Laith Altimime
Sure, the goal is 20%, but I just want to reiterate the statement made by the McLean Report, that the initial thinking after COVID-19 was the tendency to be sovereign. Thewhole world realized this is not an option. The Chips Act have really promoted the global collaboration. I think supply chain remains a key issue, that will mitigate any potential future disruptions.
The European Chips Act persuades to invest in our competitive advantage and make sure that we have the capacity to increase. We saw Infineon, NXP, Bosch, STMicroelectronics continue to invest billions of dollars to make sure that their competitive advantage, technology, but also capacity, is maintained. Due to the tremendous semiconductor ecosystem in Europe, this has also been leveraged to attract foreign investments in Europe to complement this supply chain, like Intel across Europe, Ireland, Germany, Magdeburg, back-end as a gap, the investment in Poland.
Let’s take a look at one example, silicon carbide for electrification. One model was the Wolfspeed’s cooperaton with ZF. STMicroelectronics opened more investments in the silicon carbide in Italy, Catania. The TSMC, another perfect example of a global collaborative model. It’s TSMC’s new plants in Europe, in Germany, but also shared projects with Infineon, NXP, Bosch.
Europe is a world leader in the research technology organization. We have IMEC, LETI, Fraunhofer: IMEC focuses on advanced technology, along with their most powerful partnership with ASML. LETI focuses on low power consumption technology for semiconductors, which is very much needed.
Radoslaw Mlynarczyk
Yeah, but I don’t think that we can talk about Europe as a whole, can we? Because, Mikolaj, let’s face it, the semiconductor industry in Europe is traditionally positioned in Belgium, in the Netherlands, Germany, France, even in Italy, but the Eastern and the Middle Europe, whatever you’d like to call it, Poland included, we are not as much invested in the business as the Western countries. What opportunities are opening for us now?
Mikolaj Trunin
First of all, I would like to have Europe perceived as one market. I’m 100% European, and it comes down both to economy and politics. Of course, we have different regions, different countries, and different characteristics of these countries, different histories. However, now, when we see that there are more semiconductor projects incoming, for example, to Germany, there is the limitation when it comes to talent pool. So this projects will have to spread all around Europe. And Poland, Czech Republic, Slovakia, maybe Hungary, but generally, I think Poland will be the biggest partner for the projects that are underway in Germany. Mostly because it’s just close. But also because the market is big, there’s lots of highly educated specialists. So we complement the Western European semiconductor market. That’s, in my opinion, our biggest chance.
Radoslaw Mlynarczyk
Laith, you’ve mentioned that the industry, for example, in Taiwan or Japan, is government-driven. Should we, here in Poland, learn from the lessons taught by our Asian colegues and start implementing those good practices here?
Laith Altimime
Yes. The government’s endorsement is crucial, because, as I said, if the industry is to double within five years, then everyone needs to be apart of that wave of change. USA is also investing across all levels to maintain a strategic positioning. Europe does the same, but also Asia keeps itself in the race. Tthe portfolio of countries within the industry is conitously expanding. There are new investments being developed in India, Singapore, Malaysia, Philippines, Vietnam. The acceleration of the strategic position of those countries wouldn’t be possible without a government endoresment.. It’s a big lesson for Europe.
If I were to outline the one key factor that drives the industry globally, it’d be the quadruple helix. We’ve lunched The SEMI International Policy Summit in October in the US, and then the second one in Brussels in March. It’s a theory that connects all the areas crucial for the industry’s developement: regional, global, government, academia, industry, and civil society. The implementation of such a matrix should come as a result of all the activities within a specific part of economy. Nevertheless, the governments will still play a crucial part in semiconductor expansion.
Radoslaw Mlynarczyk
That’s our job, right? To be a middleman between the government and companiesa and organizations like SEMI.
Laith Altimime
Maybe if I may just elaborate, the European Chips Act was a key inflection point, because the European Commission provided funding, matched by the member states, in fact the governments of these countries. Let’s use our imagination for a minute: there’s an opportunity for a new investment around the corner. The European Commission can put a certain amount, the government matches that and then the industry pays it’s part. We’ve had that in France ande Germany, and that shows that the European Chips Act works and actually moves the industry forward.
Radoslaw Mlynarczyk
It’s a self-driving machine?
Laith Altimime
Absolutely, yes.
Radoslaw Mlynarczyk
The last thing I want to talk about is what’s coming in the nearest future promotion-wise. SEMICON Europa takes place in Munich, in November. Mikolaj, can you please give a little hint about our involvement in this trade fair and conference?
Mikolaj Trunin
Sure. It’s the biggest trade fair in Europe for semicon industry. This year, it’s co-located with Electronica, so it truly is a really big event. Our regional stand will probably serve as a Polish stand as well this year. We’re planning to bring the companies and the universities with us, to build up the Polish community for the semicon industry. SEMICON Europa is, of course, our key event in that respect.
Radoslaw Mlynarczyk
And then in March, Laith, the ISS Europe in Sopot.
Laith Altimime
This is a huge symposium indeed. And I think this is one of the products of our partnership with Invest in Pomerania. It emphasizes the opportunities that Poland can provide for the semiconductor industry to make it even more sustainable and diverse. We moved ISS from Viena for 2025 and 2026. And with the support from Invest in Pomerania people we have found the most beautiful location.
Radoslaw Mlynarczyk
Yes, right by the sea.
Laith Altimime
Exactly. I think we have both learned so much from this business model: we can easily, adressing your earlier question, invest in countries, member states. We’re honored to host the industry in Sopot.
Radoslaw Mlynarczyk
We’ll make as much effort as we can to live up to your expactations.
Laith Altimime
Thank you very much. It’s a partnership. Absolutely. Thank you.
