On Monday, semiconductors manufacturing companies GlobalFoundries and STMicroelectronics have announced their intention to build a factory in France, near Grenoble, which represents an investment of close to six billion euros. This new factory is one of the initiatives taking part in the European Chips Act project, which aspires to increase Europe’s share in the global production of chips. These kinds of investments aim at strengthening the region’s technological leadership and resilience to disruptions in the supply chain.

As you might have heard by now, the semiconductor industry has been undergoing major disruptions since the Covid crisis. Lockdown measures from the sanitary crisis disrupted its supply chain while also creating a surge in demand at the same time since most people were locked inside and tried to keep busy in every way they could.

Semiconductors are found in most everyday appliances and accessories such as cars, washing machines, solar panels and video game consoles... This surge in demand combined with production interruptions provoked shortages worldwide and revealed Europe’s dependence on Asian production. Shortages forced factory closures in various sectors from automotive to healthcare devices. In the automotive sector, it was estimated that production in some member states decreased by up to one third in 2021 as a result of these disruptions.

Currently, Europe produces about 10% of semiconductors globally and is looking to increase this share to over 20% by 2030. “It will mobilise more than €43 billion euros of public and private investments and set measures to prevent, prepare, anticipate and swiftly respond to any future supply chains disruption, together with Member States and our international partners” stated the European Commission in February 2022.

Chips are strategic assets for key industrial value chains. As part of the digital transformation, a range of new markets for the chip industry are emerging whether it is highly automated cars, cloud, IoT, or connectivity (5G/6G) ... Semiconductors are also at the centre of strong geopolitical interests and became a very sensitive issue in terms of both economical and industrial capacities but of military power as well. As a result, Taiwan, which dominates production of chips and concentrates the most advanced semiconductors in the world, has been undergoing continued cyberattacks from China's state-sponsored hackers. 

To answer that question: it's kinda, sort of, quite, super hard to produce...to put it simply.

Firstly, because making chips is incredibly difficult. One of the jokes in the industry goes as follows " It's not rocket science - it's much more difficult ". Secondly, because it requires a lot of time and tremendous investments to be able to build fabrication facilities. Last but not least, because you have to resist intense competition, and make sure your manufacturing expertise is constantly up to date while racing with experienced players, and prevent corporate espionage. 

Furthermore, the process of making chips is so sophisticated it is almost impossible to achieve self sufficiency. Manufacturing chips takes on average three months but can go up to six months when you include the testing and repackaging processes. It involves giant factories, where some "rooms" are as big as two football fields with 700 machines each costing between €25m to €100m, dust-free room, special lights, protecting chips from UV raises, and lasers. 

Gordon Moore, an engineer who worked at one of the first chip companies at the end of the 1950s, stated that their existing pace of improvement was going to be almost exponential. Decades later, it turns out this statement almost accurately predicted the incredible increase in computing power and is now referred to as "Moore's Law". Most chips are groups of circuits that run software, manipulate data and control the functions of electronic devices. The arrangement of those circuits gives them their specific purpose. It's incredibly hard and costly to keep up to date with such fast evolving technologies. To be worth it, you need to invest almost exponentially higher amounts of money and human capital to fuel that growth. Long story short, this is how was created one of the most complex industry in the world with thousands of ultra specialised companies that make science fiction the new normal on a regular basis.