Technological geopolitics: it’s time for Europe to play its cards

During my recent "Tech & Chips Tour" from Washington to Tokyo and then Seoul, I was able to appreciate the extent to which a geopolitical Europe is not illusory, provided we give ourselves the necessary means. 

Be it in the field of semiconductors or vaccines, Europe has the research excellence, the industrial production capacity and the political will to position itself firmly on the world stage.  

My discussions with industrialists and public authorities in the US –against the backdrop of the Tech and Trade Council (TTC) – and in Asia confirm that our interlocutors attach great importance to a partnership with Europe. Expectations are high. It is up to us to lay the foundations for a genuine geopolitical Europe.  

 

Semiconductors: a strong Europe for solid international partnerships

 

 First of all, on semiconductors. While we are already working on the "European Chips Act" announced by President von der Leyen, it was important to engage the main global players in the field, especially in Asia (Japan and Korea), the real epicentre of semiconductor geopolitics. Faced with the growing tensions between the G2 (US and China), which could lead to shortages and a possible technological decoupling between the two blocs, Europe can establish a third way to ensure its autonomy while avoiding a forced and unconditional alignment. Such is the purpose of the European Chips Act. 

In this geopolitics of semiconductors, these East Asia countries are key players whose strategic interests converge with ours. This opens up prospects for solid partnerships, built – as with any partnership – on our respective strengths and not on our weaknesses.

Because indeed, Europe is holding very good cards. We are the world's centre for semiconductor research. All interlocutors from the public and private sector recognise this: without Europe and its leading research centres (IMEC, LETI, Fraunhofer), no technological breakthrough would be possible. Europe is at the heart of both the FinFet technology needed for below 5nm chips and the FDSOI technology crucial for reducing energy consumption. These technologies are vital for the digital and green transition. The Chips Act should structure this European research, define a common technological and strategic roadmap and maximise financial support for these centres of European influence on the world. 

Europe is also very well positioned on the industrial manufacturing chain, particularly in terms of the equipment needed to run large chip manufacturing plants (Mega FAB). Many companies, European or not, play key roles, for example Zeiss for optical instruments, Soitec for wafers, or AML for other equipment. But the strategic value chain of equipment manufacturers depends mainly on three large companies (and their subcontractors) in markets with little competition: ASML for lithography, Tokyo Electron for coating instruments and Applied Materials for edging and deposition instruments. Three companies, three continents – Europe, Japan and the United States – creating an interdependence that could be the basis for a broader partnership and which makes coordination imperative, especially on the question of export controls. We cannot let key technologies go to China and repeat in semiconductors what we experienced with solar panels.  

The European Chips Act could establish mechanisms to preserve European security of supply within the global industrial chain at all times, thus providing Europe with the necessary instruments to manage its autonomy. 

 

Yes, Europe has the ambition and the assets to become an industrial production engine in the markets of the future

 

 Probably most importantly in such highly strategic, cutting-edge technologies: our ambition is to transform the European competitive advantage in research and innovation into industrial deployment. We have done this for vaccines. We are working on it in batteries and hydrogen. We will succeed in semiconductors too.

I take issue with those who would like Europe to focus solely on research and design, leaving production to Asian and American players. Strategic autonomy without production facilities is doomed to failure. This is what the current shortage is teaching us. Shifting or mitigating Asian dependence to American dependence – even though we are allies – provides no guarantee of security of supply. We have seen this in vaccines, when supply chains were cut in the name of America First.  

Considering the current geopolitical tensions, it is imperative that Europe can count on a production capacity that is up to the task, both in terms of volume and advanced technology. We cannot bet on a "geographical specialisation" or global division of labour in which Europe is confined to chips above 20nm and the US and Asia provide the chips below 5nm – the real market of the future.  

It is not a question of producing everything in Europe or relocating everything here, but of anticipating the risks, analysing them, taking the appropriate measures and rebalancing supply chains. This is why our ambition is to move from 10% of world production to 20% within 10 years. As the semiconductor market will double in 10 years (from €500 billion to €1,000 billion), it will be a matter of quadrupling the current production capacity in Europe. The market of industrial digitisation and the internet of things is booming. So let there be no doubt: the demand will be there.

 

Vaccines, a perfect illustration that Europe must not stop at the research effort

 

Beyond semiconductors, the successful ramp-up of vaccine production in Europe was also latent in this dialogue with the United States, Japan and Korea: the EU leads in terms of vaccination (75% of the adult population vaccinated) but also in terms of production (300m doses/month) and exports (more than 750m doses exported to 110 countries).

Faced with this reality, the US authorities have lifted the travel restrictions between the EU and the US, which were no longer justifiable. And with my US counterpart in charge of vaccines, we also officially launched a joint EU-US Task Force to keep our supply chains open, so that we can continue to vaccinate Europe, the US and the world.

I also had the opportunity to discuss Europe's contribution to global immunity with our Asian partners. With 250 million doses exported to Japan (1/3 of all EU exports), Europe has indeed enabled the Japanese people to be 100% vaccinated. Similarly, in the Republic of Korea, with 44 million doses exported (70% of the doses administered), it is indeed Europe that is standing by its partners. In this perspective, I have strongly advocated the need to re-establish reciprocity between Europe and these two countries in terms of travel conditions, and I hope for rapid progress. 

 

Digital partnerships with the Indo-Pacific

 

The unilateral withdrawal from Afghanistan, the new AUKUS alliance... my visit to Washington, Tokyo and Seoul took place against a particular backdrop. 

It also took place in the context of the EU's cooperation strategy in the Indo-Pacific region that we presented a fortnight ago. In particular, we announced that the EU will work with partners such as Japan, the Republic of Korea and Singapore to establish broad technological cooperation but also to address our strategic dependencies, notably in the semiconductor supply chain, including therefore also a dialogue with Taiwan. 

With this visit, we have started to explore the modalities for launching our digital partnerships with Japan and South Korea. 

I could feel a real expectation from our interlocutors in Japan and Korea to start in-depth discussions on digital issues in order to build bridges for new digital partnership agreements. For example, I note a very strong convergence on regulatory issues, on the desire to cooperate on technologies but also on the issue of standards, which cannot be left to China alone in international bodies.  

We will have to implement a coordinated strategy with our partners to regain this capacity to influence standards, which is the basis of our sovereignty. Now that the initial contacts have been established, our respective teams will work more concretely on drawing up these agreements in order to move forward quickly.  

Speed, listening, political capitalisation of our successes (such as vaccines), clarity of our ambitions and preservation of our interests: these are the parameters of a geopolitical Europe, of a powerful Europe.