Assessed at more than 3 dollars, NVIDIA, the largest market capitalization in the world, illustrates the transformative power of the microprocessor sector, but the late position in Europe raises significant concerns concerning sovereignty and competitiveness. Some companies intensify, offering concrete responses to these challenges and announcing a new era for European innovation in microprocessors. European socio-economic stability depends on it. A new era is fast approaching, the American authorities having decided to bring a major blow by making the export of certain semiconductors very difficult, even to allied countries, thus depriving half of European countries of easy access to American technologies .
The global microprocessor market undergoes a deep transformation, driven by unprecedented technological advances and an intensification of geopolitical competition. Formerly considered a niche industry, microprocessors have become the backbone of modern economies, allowing everything, smartphones with artificial intelligence systems, from IoT to Cloud Computing. The rise of Nvidia, an AI world leader, underlines this changing ecosystem. The company should replace Intel in the industrial average of Dow Jones (DJIA), which said that the update aims to ensure “more representative exposure to the semiconductor industry and the materials sector, respectively”.
This domination of some world actors underlines the challenges encountered by other regions. While companies like NVIDIA, AMD and TSMC have established the norm of innovation, others – including formerly biting Intels – had trouble following. Intel’s recent difficulties highlight the dynamic nature of industry, where size and heritage no longer guarantee success. Instead, the ability to innovate, adapt and secure supply chains is essential. And initiatives thrive all over the world.
While Europe strives to strengthen its presence on the microprocessor market, Latin America is becoming a potential partner in the world semiconductor ecosystem. Although the region does not yet have major microprocessors manufacturers, countries like Mexico and Brazil are becoming more and more important in the wider supply chain. The United States, thanks to initiatives such as Chips Act, sought to deepen its partnerships in Latin America, recognizing the strategic value of the region to diversify production and secure critical resources. This should put Europe on alert. Indeed, the United States predicts to move forward with the development of microprocessor production capacities in three countries in Latin America: Mexico, Panama and Costa Rica. This strategy was unveiled by Secretary of State Anthony Blinken in July 2024 as “semiconductors’ initiative in the Western hemisphere”. Indeed, Mexico attracts billions of investments in its semiconductor and technology industries. Amazon, announced its intention to invest $ 6 billion in the country by 2026, creating more than 50,000 jobs. The Chinese government had identified semiconductors as a priority in 1956 and already channeled around $ 150 billion in its semiconductor.
The potential of Latin America lies in its ability to complete the global microprocessor market with assembly, testing and processing capacities. Although the region has not yet produced a large company to design semiconductors, its role in the supply chain could develop while global actors seek to reduce dependence on Asia. This creates opportunities for regional collaboration and investment in the sector while strengthening American access to semiconductors. Indeed, Secretary of State Anthony Blinken said:
By improving the backbone of our supply chains, better infrastructure will help ensure that the goods on which our employees count – semiconductors, electric vehicle batteries, medical supplies – are more affordable, safer and made here in The Americas.
Donald Trump’s foreign president’s planned prices on foreign imports could, however, have a real effect on the outsourcing of manufacturing technology giants in Latin America. Even the Biden administration, a few days before its mandate, decided to increase the stakes on microprocessors by tightening the sanctions against China more. This illustrates the great sensitivity of the subject on the other side of the Atlantic and the need for Europe to rearm on the industrial front.
The position of Europe in the microprocessor market remains precarious and without sufficient scope for the birth and development of a robust development ecosystem focused on the EU, it could be late for global competitors. Historically dependent on foreign suppliers for semiconductors, the region has recognized these strategic risks of this dependence. For Europe, this means creating an ecosystem in which innovative startups and new EU -based technological initiatives can flourish. This is the objective of the “chips act” of the European Union, which aims to increase local production capacity and to support the development of local technology. However, achieving these objectives requires more than policy – it requires the emergence of innovative companies capable of competing worldwide.
Europe already has important technological “links”, but not the whole chain yet. Among these links of emerging players, Sipearl, a French company specializing in the design of high performance microprocessors. Although it is still small compared to the global giants, Sipearl represents a concrete step towards the reduction of the technological dependence of Europe. Its processors, designed for use in data centers and the supercalculculculculculculculculculculk, are aligned with the strategic objectives of Europe for technological sovereignty and innovation. Sipearl’s dependence on Taiwanese manufacturing reflects the broader global interdependence on the microprocessor market, but its conceptions are only European, adapted to meet the regulatory and security standards of the region. Taiwan’s choice seems to be obvious, since the processes used in Europe do not meet the requirements. Alternative foundries may be necessary, such as Samsung, which has production capacities in South Korea and the United States, or even Intel.
Indeed, this Eurocentric approach is at the heart of the company’s development strategy. CEO Philippe Notton underlines how the flea law is not far enough to support start-ups like hers: “European flea law is a good start. If we manage to mobilize more public funds in the semiconductor sector to make things happen, as is done in most countries, it will be a positive thing. Noton, like many in the sector, believes that startups are left by this policy. However, there are positive initiatives to support the objectives of the European flea law, such as the investment of $ 3.2 billion per Silicon Box to build a semiconductor factory in northern Italy. This announcement was made last March by the Italian Minister of Business, who was happy to show that Italy can “attract the interest of world technological players”.
Europe focuses on promoting innovation and the reduction of dependence thanks to public-private partnerships. Sipearl is an excellent example, but it is not alone. Other European companies, such as Infineon Technologies (Germany) and Stmicroélectronique (a Franco-Italian company), make significant contributions to the semiconductor industry. Melexis, another company based in Belgium, plays an essential role in the development of specialized fleas for the automotive industry, supporting the push of Europe’s technological sovereignty in the key sectors. This approach also supported the growth of businesses such as ASML in the Netherlands, a world leader in lithography machines essential for the manufacture of microprocessors, and global funds in Germany, which operates one of the manufacturing facilities most advanced semiconductors in Europe. The CEO, Dr. Thomas Caulfield, has a more positive perspective and has emphasized the strategic position of Europe in the semiconductor industry, highlighting in particular the leadership of the continent in lithography through of companies like ASML. He said:
Europe should not be concerned about technological leadership problems for two reasons. One: You can’t do anything in semiconductors without lithography and Europe has the leader of lithography. No one can do anything in semiconductors without giving a CAPEX to ASML, so Europe has a great control over the semiconductor industry.
This highlights the multilateral ecosystem that many try to develop in Europe, because together, these companies demonstrate the potential of the continent to become a hub for the design and advanced production of microprocessors.
The microprocessor market is at the crossroads, offering separate opportunities in Europe to redefine its role in the world technological ecosystem. The success will however depend on sustained investment, strategic partnerships and daring innovation. By taking advantage of its forces, Europe can be both a leading actor in design and manufacturing, because he was a few decades ago. The opportunities are massive, but the same goes for the risks of late. The awards of these efforts are, however, substantial: increased economic growth, greater technological sovereignty and a central role in the formation of the future of the global microprocessor industry.
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