SOPOT, Poland, March 17 - Europe’s semiconductor sector must pursue larger-scale, highly automated manufacturing if it is to remain competitive against the accelerating expansion of Chinese producers in the power and analog chip segments, a senior Infineon Technologies manufacturing executive told delegates at an industry conference.
Thomas Altenmueller, Vice President Manufacturing Analytics at Infineon, said Chinese competitors were rapidly acquiring both capacity and know-how in chip categories historically strong in Europe. "They are learning fast. They have the capacity," Altenmueller said. "It is super serious." He attributed part of the strategic shift by Chinese firms toward power and analog devices to export restrictions on more advanced semiconductor equipment, citing limitations on access to tools such as ASML’s EUV lithography machines.
Altenmueller outlined a two-pronged recommendation for Europe - scale up production and consolidate operations - with a strong emphasis on automation. He argued that modern 300-millimetre wafer fabs, combined with higher degrees of automation, would deliver the economies of scale needed to mitigate the drag from Europe’s higher labour costs.
Executives from STMicroelectronics, speaking at the same conference, described plans to automate legacy fabs that cannot be fully modernised. Their approach includes deploying robots to boost throughput and operational efficiency in facilities where full upgrades to 300-millimetre lines are not feasible.
While European firms do not command significant share in AI accelerators - markets dominated by Nvidia, Samsung and TSMC - Altenmueller pointed to energy-efficient power delivery chips as an area with substantial growth potential. Such components play a key role in managing the increasing energy demands of data centres, he said.
The European Union’s initial Chips Act set an objective of raising the bloc’s portion of global chip production from around 10% to 20% by 2030, concentrating largely on new projects and first-of-a-kind facilities. Altenmueller warned against neglecting Europe’s existing profitable plants, which he described as essential to maintaining competitiveness worldwide.
As the EU prepares a refreshed Chips Act 2.0, Altenmueller reiterated the bloc’s comparative advantages. "Europe’s competitiveness ultimately resides in its traditional industrial strengths in automotive and industrial chips," he said. "Don’t forget our strengths."