In the Alpine city of Villach, Austria, industrial engineer Andreas Wittmann was contemplating his latest project — the European Union’s newest chip factory.
“20 years ago, it was not in our mental horizon to build a [fábrica de semicondutores] in Europe,” he said, just days before the official opening of the €1.6 billion (R$10 billion) facility on Friday (17). But “the advancement of automation has reduced Asia’s advantage.”
The executive of Europe’s largest chip makers, Germany’s Infineon, did not need to make an effort to explain the argument.
The 60,000-square-metre production unit — about eight soccer fields — whose creation he commanded was filled with robots, transporting silicon wafers on a system of overhead rails; its LED lights flashed green and red in a methodical rhythm. Unlike “traditional” factories, which would have around 140 workers on the production line, the new facility only requires ten of them.
The reduction in personnel costs was one of the reasons Infineon decided to expand the unit it had in picturesque Villach in 2018. The factory specializes in power superconductors, mainly for use in cars, which need dozens of chips to help controlling all systems, from power windows to navigation software.
An existing factory in the city of Dresden, Germany — which, among other customers, supplies Volkswagen — was already working at capacity, and now that automakers are focusing their efforts on electric vehicles, many of which require even more chips. of power, the argument in favor of investment was simple.
But the opening of the factory, which makes semiconductors using modern 300mm silicon wafers, also coincides with a chronic shortage of chips that has devastated the auto industry, forcing production lines to stop and leading to the cancellation of assembly of millions of cars.
As a result, Ursula von der Leyen, President of the European Commission, announced plans for a new “Chip Law” with the aim of “together creating a new European chip ecosystem, which would include production”.
Infineon said its plant in Villach would help alleviate supply bottlenecks for its biggest customers, many of which are located nearby. “Our message to customers is that we will be able to supply them,” Reinhard Ploss, the company’s chief executive, said at a press conference on Friday, even though the gap between ordering and producing power chips is four. months.
“They won’t come cheap,” added Ploss, as the cost of supplies increased in the crisis. “We believe prices will go up a lot this quarter.”
While Infineon has received some subsidies for its plant in Austria, which Ploss says “helped to dampen and offset global distortions,” he is not among those who believe that the problems of supply, and security of supply, will necessarily be resolved. for the construction of new factories in Europe.
The chip makers’ biggest customers — in raw numbers, smartphone and computer makers — aren’t based in Europe, he told the Financial Times this year, and would remain at the front of the world supply queue regardless of factory locations.
Engineers at the Villach plant added that it would still take three years to build a new plant if the decision is made today. “Semiconductor factories are more or less the Champions League of industrial construction,” said Wittmann.
Worse, the rest of the industry is “between 12 and 18 months behind in its regular investments,” said Jalal Bagherli, chief executive of Dialog Semiconductor, a rival European chip company that has just been acquired by Japanese group Renesas, which is also supplies semiconductors to car manufacturers.
Dialog relies on third-party suppliers to make its chips, but Bagherli said some of them were not interested in expanding their capacity when demand for consumer electronics led to a chip-buying rush during the pandemic.
“When we asked if they were investing, the answer was that, well, this was all temporary, it would only last three months, and they didn’t intend to invest $10 billion [R$ 53 bilhões] more and build [uma fábrica de semicondutores] just because someone is working from home.”
It also remains to be determined whether current levels of demand will be sustained. “Because the industry is capital intensive, we only spend money when we are sure there will be demand,” said Thomas Reisinger, a board member at Infineon Austria.
“If you don’t have the components you need, you tend to place orders too high,” said Holger Schmidt, an analyst at German bank Metzler, “and even if semiconductor manufacturers discount these double orders from their calculations, you can never have assurance [de que os pedidos de fato refletem a demanda]”.
On Friday, Infineon, one of the few European companies to design and manufacture most of its chips directly, was praised by politicians, including the chancellor [primeiro-ministro] Austrian Sebastian Kurz, and European Union representative Martin Selmayr, who said Infineon was “an essential partner” in creating “a European ecosystem of first-class chips”.
But the “back-end” production process of semiconductors to be manufactured in Villach, which is labor intensive and for which “wage costs play an important role”, will continue to take place in Malaysia, where Infineon has a finishing factory.
It’s a trend that Reisinger, who worked at the Malaysia unit, says he doesn’t think is likely to be reversed. “We have the expertise and the engineers there, and I think we will continue in Asia [para o ‘back-end’]”, he said.
Translation by Paulo Migliacci