Strategy required to defend Ireland’s €15.5bn computer chip industry, Tyndall warns

The Government must develop a national strategy for Ireland’s domestic semiconductor industry to reap the full benefits of the European Union’s new €43 billion plan to boost the bloc’s production of microchips, researchers have warned.

In a position paper, the head of EU programmes at Cork-based deep-tech research centre Tyndall National Institute, Dr Giorgos Fagas, has argued that the Republic must “double down” on the development of the sector if it wants to defend its current market share and keep up with other European and western countries.

The EU Chips Act, a €43 billion plan to double the bloc’s current share of the global semiconductor market to 20 per cent by 2030, was finalised in April and adopted following European Council approval on July 25th. Aimed at safeguarding Europe’s strategic autonomy in the global microchip supply chain following widespread disruption during the Covid-19 pandemic, the strategy mirrors similar initiatives in the US, the UK and elsewhere.

[ Meta and Tyndall National Institute team up to advance augmented reality ]

[ China bans some sales of chips from US company Micron ]

Against this backdrop, the Government should develop a national chips strategy with a parallel target of doubling the semiconductor industry here, Tyndall has argued.

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The Republic currently plays host to a semiconductor cluster that employs about 20,000 people and generates estimated annual revenues of €15.5 billion, according to the position paper.

It includes Intel, which employs more than 5,000 people at its Leixlip campus – the tech giant’s only European semiconductor wafer fabrication facility and its largest outside the US – as well as Analog Devices in Limerick, which employs some 1,300 people.

Patrick Gelsinger, chief executive of Intel, said the EU Chips Act “underpins” the Nasdaq-listed company’s plans to invest in Ireland over the coming years. “It also presents an important opportunity for Ireland to further build its ecosystem and participate in the future evolution of the semiconductor industry,” he said.

Dr Fagas noted that foreign direct investment had also “stimulated a significant indigenous semiconductor sector” here, comprising SMEs like Decawave, Arralis, Movidius, Parthus and a host of others.

[ Samsung to cut memory chip output to tackle global glut as profits tumble ]

“However, while the Irish semiconductor cluster looks strong, action is required to maintain and strengthen Ireland’s position in semiconductors and to exploit the current opportunities as the global semiconductor market is projected to exceed $1 trillion (€910 billion) by 2030,” Dr Fagas warned. A national strategy could provide direction for the industry here and deliver design capacity and testing facilities to ensure domestic chips producers maintain their cutting edge.

“Ireland is well-positioned to exploit the opportunities in the European and global semiconductor ecosystem thanks to its strong ICT industrial base and R&D excellence in the sector,” said Dr Fagas, “However, to maintain and strengthen Ireland’s position usual in the current volatile environment requires coherent action in building the capacity to innovate, preparing skilful talent and securing new investments in the sector. This cannot be business as usual.”

Urging “focus and intervention”, Tyndall chief executive Prof William Scanlon said that there was a “short window” of opportunity for public and private organisations to achieve the bloc’s 2030 targets.