Restructuring of the European semiconductor industry through government subsidies: focus on Germany and implications for GPNs
| Dates: | 3 June 2024 |
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| Times: | 15:00 - 16:30 |
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| What is it: | Lecture |
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| Organiser: | Global Development Institute |
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| Who is it for: | University staff, External researchers, Adults, Alumni, Current University students, General public |
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This lecture is hosted by GDI's Global Production Networks, Trade, and Labour (GPNTL) group.
Speakers:
Gale Raj-Reichert,?Professor of Politics,?Bard College Berlin
Tobias Wuttke, Post-doctoral Researcher, Bard College Berlin
Since 2020, the semiconductor industry in Europe has faced: 1) a Covid-19 pandemic induced shortage of semiconductors, especially for the automotive industry, 2) a rise and shift in demand for semiconductor chips to meet growing consumption of electric vehicles (EVs), and 3) geopolitical trade tensions vis-à-vis China. The European Union has played a role in shaping the response of the semiconductor industry in Europe to these developments through two distinct policies – the Important Projects of Common European Interest (IPCEI) and the European Chips Act – enabling large subsidies by member states to companies. This has led to a significant increase in semiconductor investments in Europe, in particular Germany, for the first time in over twenty years. Based on interviews with semiconductor producers investing in Germany from 2022 onwards, we unpack how the above dynamics, and in particular the role of the state, have influenced firm decisions, thereby leading to the reconfiguration of semiconductor industry GPNs. Our findings show that, with the availability of subsidies now, semiconductor producers are better able to respond to rising demand for automotive-specific semiconductors, increasingly for customers in Europe who are also demanding more Europeanization of production to increase supply chain resiliency. While shifts in automotive markets and customer demands combined with large state subsidies are increasing semiconductor production investments in Europe, our findings do not show a reversal of globally fragmented production of semiconductors.
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