Microelectronics is one of the most important technologies for innovation and progress in almost every area of ​​life. And while many sectors are suffering from the coronavirus pandemic, microelectronics continues on its growth trajectory. According to the current 2021 microelectronics trend analysis by ZVEI (B1.ZVEI), the global microelectronics market will grow by 6.8% year-on-year in 2020, reaching $440 billion. This is despite a 3.2% contraction in the global economy during the same period. This trend is driven, among other things, by strong demand for electronic equipment for people working from home (e.g., PCs) and consumer electronics (game consoles, televisions). But electric mobility, autonomous driving, edge computing, and 5G are also among the growth drivers.

Currently, for various reasons, demand for microelectronics exceeds supply: The pandemic has created a boom for computer technology and consumer electronics manufacturers, while the surprisingly rapid recovery in car sales is being hampered by chip shortages. This was followed by pandemic-related production disruptions, particularly for Asian chipmakers, due to storms in Texas (Samsung, NXP, and Infineon), wildfires in Japan (Renesas), and earthquakes in Korea (Shin Etsu, the world's largest silicon wafer manufacturer).
Global investment in the chip industry

Suppliers of electronics are also among those benefiting from the high demand for chips, as semiconductor manufacturers are investing billions in new machines and systems. On April 1, 2021, Handelsblatt reported that TSCM plans to invest $100 billion over the next three years, and Samsung around $175 billion over the same period. In the Frankfurter Allgemeine Zeitung (FAZ) on September 8, 2021, Intel CEO Gelsinger announced an €80 billion investment in the construction of chip factories in Europe, possibly including in Germany. The condition for this investment is that approximately 30 percent of the funds be covered by public subsidies.

Finally, the Chinese semiconductor sector also benefits from generous state aid. According to the Semiconductor Industry Association (SIA), the government subsidizes Chinese chip production with approximately $17 billion annually.

This helps China easily maintain its global market share. According to the ZVEI press release of June 29, 2021, this share was on a downward trajectory at the beginning of last year, at 34.4 percent, but remained significantly ahead of the United States at 21.7 percent (an increase of 13.6 percent) and Europe at 8.5 percent (a decrease of 1.2 percent).
Current subsidies in the US and Europe

Massive subsidies in the US and Europe are going to change the global market share: Biden's trillion-dollar investment program, for example, plans to invest $100 billion in "critical goods" infrastructure, including microelectronics.

In Germany, the Federal Ministry of Education and Research is supporting microelectronics research and innovation over the next three years with €400 million in funding through the federal government support program "Microelectronics. Reliable and Sustainable. For Germany and Europe." According to the ZVEI (European Union Agency for Innovation and Technology), the research program "Important Projects of Common European Interest" (IPCEI-II) is also eligible to sustainably strengthen microelectronics production in Europe.

The "Chip Law", recently announced by the EU Commission, a legislative package recommended to strengthen the European chip industry, gives cause for hope.

Meanwhile, the "Electronic Components and Systems for European Leadership" (ECS) initiative, launched in 2014, will expire in 2025. With the expansion of the current EU research program "Horizon Europe," the initiative will be renewed as "Key Digital Technologies" (KDT). Negotiations at the European level are nearing completion; the official launch is scheduled for January 2022 at the latest.
Record investments in chip equipment.

Therefore, all chip suppliers have reason to be optimistic about the future, even if they are not directly affected by supply chain disruptions and high raw material prices. The SEMI industry association's "World Fab Forecast Report" (Halls B1.175, B1.571, B2.161) forecasts that this year's record-breaking $90 billion in global investments in front-end processing equipment (wafer manufacturing processes) will increase to around $100 billion in 2022. At $44 billion, foundry suppliers account for the largest share, followed by memory suppliers at over $38 billion, and microprocessor suppliers at $9 billion.

The market for installation and packaging equipment (backbone processes) is expected to grow by 56% to reach $6 billion this year, followed by an additional 6% the following year. For the semiconductor test equipment sector, the industry association SEMI anticipates a 26% increase to $7.6 billion by 2021, and a further 6% growth in 2022.
Europe's largest microelectronics trade fair

Thanks to SEMICON Europe's close collaboration with productronica, visitors to the trade fair will be able to get a glimpse into the exciting transformations in the world of microelectronics, both in terms of technology and market policy, from November 16 to 19 at the Munich Trade Fair Centre. Industry representatives will also benefit from a support program featuring a high-quality conference. productronica 2021 is therefore the ideal place to network with decision-makers, innovators, and experts on the latest trends and technologies.