As mentioned in my introductory post on the 2nd Chipnation Congress, I will be sharing my thoughts on some of the talks I enjoyed there. In this post I will be talking about the presentation by Mr Roger Espasa, CEO and Founder of SEMIDYNAMICS.
Presentation summary.-
Founded in Barcelona in 2016, Semidynamics is a Spanish company with commercial offices in the USA, Korea, China and Germany, which is part of the European Processors Initiative (EPI). They are a provider of customizable processors IP cores based on the RISC-V architecture, and capable of simultaneously offering high bandwidth and high performance, thanks to the incorporation of vector processing units, which make them ideal for executing artificial intelligence applications.
Its CEO and Founder, Mr. Roger Espasa made a presentation on his view about the opportunities and needs of the Spanish semiconductor ecosystem, from their perspective as an IP provider and fabless company. In his presentation, he tried to shed light on the global microelectronics and semiconductor value chain, to then draw attention to the almost absence of European stakeholders in the specific area of processors (something well known in the sector, but which does not cease to attract attention when you see it in black and white on a couple of slides, as shown in the screenshots of his presentation, where on the left are shown the suppliers of global processors, and on the right the European representatives, which except for NXP, are basically start-ups with no relevant weight in the market today).
Then it came the real wake-up call: China's tremendous bid to dominate the sector.
Roger ended by showing his opinion on the main opportunities and needs of the sector in Spain:
Opportunities. In terms of opportunities, he highlighted talent, deglobalization, data and computing sovereignty, and a low level of competition in Europe:
Talent.
He stressed that he has found that there is a huge amount of talent available in Europe, and in particular, in Spain.
He pointed out to the need to create degrees in chip design and semiconductors, not just master's degrees or chip Chairs.
Deglobalization. He mentioned that it can be an opportunity for companies since, as is the case of the PERTE Chip, many countries in the EU and the EU itself, are providing unparalleled funds to derisk the huge investments needed. Never before has there been this level of public support.
Data and compute sovereignty policies. In both cases, these policies create traction on our sector: a demand that, to be sustainable without falling into supply chain shortages, and ensuring the absence of interference, or backdoors from third countries, will favour nurturing of local suppliers.
Low level of competition in Europe. In general, there is no concentration of supply, which means that practically all companies have opportunities to sell their products and grow.
Needs. As for the sector needs, he made use of a convenient agro-metaphor: planting and watering:
Plant. Public aid is needed. In general, the PERTE Chip has put on the table a level of public aid that the sector has never enjoyed before, but there is room for improvement, e.g.:
Subsidies without (or with a low level of) guarantees. There is still a lot of aid that requires a substantial level of guarantees, and there are few companies that can support this requirement.
Streamline public funding process: increase speed and flexibility. In Europe, and in Spain too, we are going at a slower speed than the United States and China. He mentioned that in his case it took 3 years from the time they won their IPCEI until they received the money in the bank. Moreover, the situation has changed since they applied, so their plan (3-years later) should be updated, however, the current processes in place lack the flexibility to make the necessary adaptations and they have to stick to the plan they applied with, which has no sense.
Continuity. The world does not end in July 2026 and projects in this sector need patient investment. A formal declaration from the Public Administration is needed to give more confidence to the sector.
"Real" stock options. Spanish law only contemplates what is usually called phantom options, which do not grant ownership of real shares, but an economic right linked to the value of said shares, which is not enough to be able to retain key employees. This needs to change.
Watering. It would be a shame if the initially supported companies missed the boat because they did not have additional funding for the later stages. In particular, he mentioned:
Funding for later stages. In particular, he mentioned a specific need of fabless companies, support to finance the expensive full-mask tape-outs, however, we can generalise this and think about creating a full funnel to support the companies from the initial investment, until these companies are really ready to walk alone.
Pre-commercial public procurement. Possibly better than a grant, this type of procurement encourages innovation and the development of new technological solutions and gives confidence to private investors and potential customers.
In conclusion, the points that I would highlight from his presentation, and a few personal thoughts on them would be:
He argued that microelectronics should only be applied to the field of off-chip electronics design. I disagree with this, because by definition it deals with all the knowledge necessary to design integrated electronics, although it is true that the prefix "micro" in microelectronics has long since been obsolete.
He questioned the interest in actions aimed at creating manufacturing capacity (backend) in Spain. My opinion, and I think it is the majority, is that it does not seem to make sense to bet on creating manufacturing capacity in "small" nodes (e.g. <13nm) and with traditional technologies. Another different thing, and one that could make sense (in my opinion) would be to attract investment to develop backend capacity in larger nodes, in OSAT, in the manufacture of optronic or photonic devices (e.g., CPO).
The wake-up call about China's huge bid to dominate the sector. Something undeniable with which I totally agree. The reflection is how this point has been reached. In my opinion, China's gamble began when they took advantage of the opportunity offered by globalization. By offering unbeatable manufacturing capacity from a cost point of view, it attracted the factories of the main leaders, and, again in my opinion, the need to solve problems at the factory site, dragging knowledge and R+D, and creating the breeding ground to create a complete local ecosystem.
The call for attention to the need for a university degree specialized in semiconductors and chip design (i.e. in microelectronics ;^D). It's not that I disagree, but I don't know if a university degree is the answer. I do not sympathize with the atomization of degrees in the University, which already seems more like an alphabet soup in which our young people despair when trying to select a university education. Likewise, we must ensure that training, especially that which is heavily subsidized, reverts to the national fabric. In addition, it remains to be seen whether in the context of the current talent shortage it is expected that in 2030 more than 1 million additional positions will be needed in the sector globally, and in the case of the United States, for example, a demand for 88,000 positions is expected, when only about 1,500 engineers with this type of specialization graduate from its universities. which is clearly insufficient. I wonder if the national industry will be able to resist the assault of companies capable of offering much higher salaries. In short, I believe that an in-depth study is needed, which feeds proactive strategic decisions, and not only tactical and reactive decisions. (Some reports that address this issue: https://www.appliedenergysystems.com/semiconductor-skills-crisis-continues/, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/technology-media-telecommunications/deloitte-us-the-global-semiconductor-talent-shortage.pdfor https://www.mckinsey.com/industries/semiconductors/our-insights/how-semiconductor-companies-can-fill-the-expanding-talent-gap).
The current trend towards a certain degree of deglobalisation and independence from third countries and the available public funding is a golden opportunity, which can be materialised if, and only if, from the public administration:
The means are put in place to generate (i.e., adequate training plans) and retain/attract talent ("real" stock options).
Administrative barriers that do not prevent access to public aid for small companies that are not yet consolidated (e.g., subsidies without guarantees, faster access to committed funds, pre-commercial procurement) are eliminated.
Although the effort made so far from both Europe (JU Chips, IPCEIs) and Spain (PERTE Chip), has been significant, in general this aid only covers part of the way, so it would be appreciated if mechanisms that continue to provide support are put on the table (e.g., in the case of aid granted for design, continue to support these companies in the costly subsequent stages, in particular he mentioned the case of full-mask tape-outs and public pre-commercial procurement.
Presentation takeaways.-
Summary: Europe must seize its semiconductor opportunity by addressing talent shortages, funding delays, and sovereignty challenges for strategic growth.
Recommendations.-
Invest in specialised education and training in chip design and semiconductors to meet future demands.
Address global semiconductor talent shortages with proactive education, training and retention strategies. Reform Spanish stock option laws is crucial to retain key talent.
Streamline public funding processes for faster, more flexible access to resources.
Establish long-term funding mechanisms to pave the way for costly later-stage semiconductor investments (e.g., full-mask tape-outs).
Focus on specific strategic niches to differentiate Spain’s semiconductor industry from the global competition.
Promote pre-commercial public procurement to incentivise demand, and grow the company reputation without hurting their finances.
Develop a cohesive funding funnel to support companies from startup to maturity phases.
Eliminate administrative barriers preventing small companies from accessing public aids.
Leverage deglobalisation to strengthen Europe’s semiconductor supply chain autonomy.
Advocate for strategic foresight in Europe’s semiconductor policy development.
Align sovereignty policies with fostering local R&D and reducing external dependencies.
Build backend capacity in niche markets not requiring leading-edge node sizes.
DISCLAIMER: My views are my own: partial, subjective, biased and, unfortunately, not immune to mistakes nor misunderstandings on my side. In no way I pretend to be accurate in my interpretation, so please, check the original recording provided and feel free to disagree!
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