[News] European Chipmaker CEOs Warn of Nationalist Policy Risks

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A report from Liberty Times, citing Reuters, states that Infineon, NXP, and STMicroelectronics—the three major European semiconductor manufacturers—have expressed that the efforts by the U.S., China, and European governments to establish and fortify their own semiconductor industries are creating increasingly serious challenges for companies operating in the semiconductor sector.

Following Trump’s re-election as U.S. President, the CEOs of Infineon, NXP, and STMicroelectronics made a rare joint appearance on the 11th, underscoring that over the past decade, their businesses have encountered substantial challenges due to rising uncertainty and the intensification of nationalist industrial policies, according to the Reuters.

On the topic of nationalist policy risks, Infineon’s CEO, John Hanebeck, noted that supply chains are moving toward increased fragmentation, a trend likely to worsen with anticipated tariff hikes, as the report indicated. This comes as Infineon projects lower sales for its new fiscal year, citing continued weak demand for chips in the automotive and industrial equipment sectors, as a report from the Wall Street Journal noted.

The Reuters report noted that Infineon, NXP, and STMicroelectronics are major suppliers of chips used for cars, electrical power controls, and industry, and they are currently seeing solid performance in China, driven by its booming electric vehicle market. In contrast, other global chip markets remain sluggish, with the exception of chips used in artificial intelligence, as the report indicated.

Jean-Marc Chery, CEO of STMicroelectronics, expressed similar concerns, noting that the high costs of reconstructing supply chains on different continents to create “China for China” and “West for the West” chips are extremely high, both in materials and engineering.

Kurt Sievers, CEO of NXP, also remarked that no single country can dominate the chip industry or operate independently of others. He believes that if any country attempts to do so, chips would become so expensive that no consumer could afford devices that use chips. He added that over time, governments will increasingly recognize the severity of this issue.

According to a report from Ijiwei, Infineon is also said to delay the second-phase construction of its fab construction plan in Kulim, Malaysia due to the downturn in the semiconductor market.

Read more

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(Photo credit: Infineon)