布魯蓋爾研究所-中國尋求半導(dǎo)體自力更生對歐洲的啟示

PolicyContribution

Issuen?19/22|November2022

LessonsforEurope

fromChina’squestforsemiconductorself-reliance

AliciaGarcía-HerreroandPaulineWeil

Executivesummary

AliciaGarcía-Herrero(alicia.garcia-herrero@)isaSeniorFellowatBruegel

PaulineWeilisaformerResearchAnalystatBruegel

Semiconductorsareacriticalinputtoproductionofinformationandcommunicationtechnologyandmanyothergoods.Themajoreconomieswanttobeabletoproducechipsathometoavoidexcessivedependenceonsupplychainsinanincreasinglyunpredictableworld,wheretradeisbeingcompromisedbecauseofnationalsecurityconcerns.Chinawasfirstintermsoftimingandscaleoffundingtosupportitsitssemiconductorindustry.Since2015,Chinahasspent$150billionupgradingitssemiconductorindustry.Success,however,hasbeenlimited.China’smassiveindustrialpolicyefforthasbeenmostsuccessfulinincreasingcapacityforassemblyofchips,thoughthatisalsotheleastvalue-addedpartofthesemiconductorsupplychain.ProgressonchipdesignandfabricationinChinaremainunderwhelming.

TheUnitedStateshasalsostartedimplementingits$50billionpackagetosupporttheproductionofchips.TheEuropeanUnion,meanwhile,hasnotyetfullyfinaliseditsmainsemiconductorinitiative,theEuropeanChipsAct.

China’sexperienceoffersanumberoflessons.First,chipfabricationrequiresmassivefixedassetinvestmentand,therefore,largesubsidies,butwithnoguaranteeofsuccess.Second,onereasonfortheunderwhelmingresultsofChina’ssemiconductorpolicyisUScontainment,throughexportcontrolsandothermeasures.Inthisrespect,theEUshouldfinditeasierthanChinatoupgradeitschipsindustrybut,giventhecosts,focusingonthehighest-endpartofthesupplychainwouldbethebestapproach.Assemblyandproductionoflower-endsemiconductorsalreadyfaceovercapacity,giventhefinancialresourcesalreadyinvestedbyChina.

Recommendedcitation

A.García-HerreroandP.Weil(2022)‘LessonsforEuropefromChina’squestforsemiconductorself-reliance'PolicyContribution19/2022,Bruegel

1Introduction

SemiconductorsareChina’smainimportitem,aheadofoil.Theyareacriticalinputtoinformationandcommunicationtechnologyproduction,whichChinadominatesglobally,andalsotootherindustrieswhichChinaeitheralreadydominates(solarpanels)orwantstodominate(electricvehiclesand5G-readytelecommunicationshardware,amongothers).

Chinesepolicymakersarefullyawareoftheircountry’ssemiconductorproductionlimita-tions.Since2014,theChinesegovernmenthassupporteditssemiconductorindustry,along-sideseveralotherstrategicindustries,throughanindustrialpolicythatisorientedtowardsreducingexcessivedependenceontherestoftheworld(so-called‘dualcirculation’).Thesemiconductorindustryisprobablythemostimportantofallstrategicsectorsbecausesem-iconductorsareanessentialinputtomanyothersectorsand,thus,essentialtoclimbingupthevaluechain.Inaddition,theUnitedStates’spushtocontainChina’stechnologicaldevel-opmentisverymuchcentredaroundthesemiconductorsector,whichisperceivedasChina’stechnologicalAchilles’sheel.Infact,theUS’sso-called‘EntityList’,orlistofChinesecompa-nies,organisationsandindividualstargetedbyUStraderestrictionsimposedbytheTrumpAdministration1,focusesonlimitingChina’saccesstohigh-endsemiconductors,amongotherproducts.ThisUSpressurehasacceleratedChina’squestforself-reliance,asclearlyreflectedinPresidentXidualcirculationstrategy,announcedon14May2020(García-Herrero,2021).

WhiletheimportanceofthesemiconductorsectorforChinaisbynowcrystalclear,othermajoreconomieshavealsosoughtmorerecently,especiallysincethepandemic,toensuretheirsemiconductorsupplies.TheUSandtheEuropeanUnionhavebothannouncedmajorsupportplansforthedesignand/orproductionofsemiconductorswithintheirborders.Againstsuchabackdrop,weevaluateChina’sindustrialpolicyonsemiconductorsandcom-pareistomorerecentUSandEUefforts,inordertoassesswhetherChinaisanexampletofollowonthedesignandobjectivesofsuchindustrialpolicies.

2China’searlyindustrialpolicyonsemiconductors

Awareofitsmassivedependenceonimportsofsemiconductors,Chinastartedin2014tostepupitseffortstoreduceitsrelianceontherestoftheworld.China’scomprehensiveindustrialpolicystrategy,MadeinChina2025,publishedin2015,includessemiconductorsasoneofthemainareaswhereChinawantstofocusitsindustrialpolicy.Thestrategyidentifiedtenhigh-techsectors,includingsemiconductors,ofmajorrelevancetoreduceChina’stechno-logicaldependenceontheWest.Similarly,theNationalGuidelinefortheDevelopmentandPromotionoftheICIndustry(inwhichICreferstointegratedcircuit),published2bytheStateCouncilin2014,setoutastrategyspecificallytoreducetheimportrelianceoftheChinesechipsindustry.

Governmentsupportwasofferedviathecreationofintegrated-circuitfundsatnationalandstatelevels,andthroughotherchannels,includingbyguidingbankstosupportfirms(OECD,2019).Thecentralgovernmentalsosetuptwoad-hocpublicfunds(socalledBig

1See

/index.php/policy-guidance/lists-of-parties-of-concern/entity-list

.

2Xinhua,‘ChinaannouncesmeasurestoboostICindustry’,25June2014,

/

business/2014-06/25/content_17613997.htm

.

2PolicyContribution|Issuen?19/22|November2022

Funds).Thefirstinvestmentfund,createdin2014,raised$21billion3(139billionrenminbi)tobeadministeredbytheMinistryofIndustryandInformationTechnology(MIIT).Thefinanceministrydisbursed36percentofthefundsandChina’slargestdevelopmentbank,ChinaDevelopmentBank(CDB)disbursedanother22percent.

Figure1:LargestshareholdersinChina’sfirstICinvestmentfund

E-TownCapital

Other

ChinaNationalTobacco

16%10%

ChinaMobile

5%11%

22%

36%

ChinaDevelopmentBank

MinistryofFinance

Source:BruegelbasedonHuang(2019).Note:IC=integratedcircuit.

AsecondnationalBigFundwassetupinOctober2019,havingraised$35billion,or204billionrenminbi4,andwithsimilarmajorstate-controlledshareholders(Figure2).Thistime,anothermajorstate-ownedfinancingvehicle,ShanghaiGuosheng,contributedwith7percentoftotalfunding,evenmorethanBeijingventurecapitalagencyE-TownCapital.Inotherwords,thestateplaysabiggerrolethanmightbeapparantatfirstglance,asgovern-ment-fundedinvestmentcompanieswereimportantplayersinrunningthesefunds,aswellasprovidingtheirfunding.Privatefirmswereincludedinbothfundsbutrepresentedlessthan1percentoftotalfunding.Inthesecondround,foreigninvestorswereinvited,althoughnonehaveenteredthefund5.

Figure2:LargestshareholdersinChina’ssecondICinvestmentfund

E-TownCapital

ChinaNationalTobacco

5%

7%

ChinaDevelopmentBank11%

Other55%

15%MinistryofFinance

7%

ShanghaiGuoshengGroup

Source:BruegelbasedonOECD(2019).Note:IC=integratedcircuit.

3WeiSheng,‘WhereChinaisinvestinginsemiconductors,incharts’,technode,4March2021,

https://technode

.

com/2021/03/04/where-china-is-investing-in-semiconductors-in-charts

.

4WeiSheng,‘China’ssecondchip-focused“BigFund”raises$29billion’,technode,28October2019,

https://

/2019/10/28/chinas-new-chip-focused-big-fund-raises-rmb-204-billion/

.

5BloombergNews,‘Chinainvitesforeigncashtobuildaworld-classchipindustry’,25April2018,

https://www

.

/news/articles/2018-04-25/china-invites-foreign-cash-to-build-a-world-class-chip-industry

.

3PolicyContribution|Issuen?19/22|November2022

Inadditiontothetwobignational-levelfunds,atleast15localgovernmentfundshavebeencreatedatcityorprovinciallevel,totallingatleast$25billionincapitaltoinvestinthesector(SIA,2021).NationalBigFundsandlocalgovernmentfundsmighthavechannelledupto$150billiontosupporttheChinesesemiconductorindustryfrom2014to2020(OECD,2019;CongressionalResearchServices,2021).

Whilefundingreliesmainlyonstate-controlledentities,includingstate-ownedenter-prisesandlocalgovernments,investmentsalsotargetprivately-ownedenterprises.Infact,relianceonmarketforceswastheofficialstrategyinthe2014guidelinestoincreasethereturnonthepublicfunds.ThestrategywasalsofortheBigFundstoremainminorityinvestors.Overallhowever,ownershiplinkagesareopaque,makingitdifficulttoidentifytheultimatebeneficialowners(OECD,2019).Whilethestate-controlledfundsarenotmajorityinvestorsinmostfirms,thestatehasbecomeamajorityshareholderinmostmedium-andlarge-sizedsemiconductorenterprisesinChina(OECD,2019).

Beyondthefundsdescribedabove,governmentsupportforthesemiconductorsectorisalsoprovidedthroughgovernmentgrants,taxincentivesandlowinterestloans,foranamountestimatedtohoveraround$50billion(SIA,2021).Taxbreakswereintroducedtoencouragetheproductionofhigher-endsemiconductors.Firmsthathaveoperatedformorethan15yearswereexemptedfromcorporateincometaxforupto10yearsiftheymanagetoproduce28nanometer(nm)chipsorbelow6.Producersofchipsfrom65nmto28nm,wereexemptedfromcorporateincometaxforfiveyears,andcouldgeta50percentdiscountonthecorporaterateforthenextfiveyears.Additionalfinancialsupportcomesintheformofbor-rowingatbelow-marketrates;bankswereencouragedtosupportthesector.Therearealsotaxincentivesfortheconductingofresearchanddevelopment(R&D),withcompaniesallowedtodeductfromitstaxableincome200percentofitsR&Dcosts.WhilethesemeasureshavesupportedthechipindustryinChina,theyhavecreateddistortionsglobally,especiallygiventhesheersizeofChina’smarket.

ThegovernmentalsosupportssemiconductorproducersinraisingequityontheShanghaiStockExchange(SSE)ScienceandTechnologyInnovationBoard(STARMarket),establishedin2019.OntheSSESTARMarket,17percentofcompanieswereinthechipssectorinJanuary2021,nearlyhalfofwhichworkedindesign.China’sregulatoryenvironmenthasalsohelpedwhenmassproducingnewsemiconductors,includingbyeasingconsumerprotectionmeas-ures.Lastly,semiconductorcompanies,bothforfabricationandassembly,havebeenofferedlandatbelowmarketprices.

3AssessmentofChina’sstrategyofstatesupport

Chinaprovidesmoresupporttoitschipsindustrythananyothereconomy.Chinahasinvestedmassivelyinchipcompanies,whencomparedwithglobalpeers(Figure3).TheBigFundshavealsoprovidedvastsupporttointernationalmergersandacquisitions(M&A)inthesector.ChinabecamethesecondbiggestplayeraftertheUSinsemiconductorfirmM&As,thoughithasfallenfurtherbehindsince2017whenBeijingintroducedadditionalmeasurestocontrolcapitaloutflows(OECD,2019).

6Microchipsaremeasuredinnanometres(nm),withalowernmindicatingamoreadvancedchip.Chipsarepresentlybeingproduceddownto3nm.Seeforexample

/en/technology/all-about-

microchips/microchip-basics

,andArjunKharpal,‘Samsungaimstomaketheworld’smostadvancedchipsin5years,asitplayscatchupwithTSMC’,CNBC,4October2022,

/2022/10/04/samsung-aims-

to-triple-production-for-most-advanced-chips-by-2027.html.

4PolicyContribution|Issuen?19/22|November2022

Figure3:Estimatedtotalgovernmentsupportprovidedtosemiconductorfirms,

2014-2018

TexasInstruments

VanguardSemiconductor

Nvidia

In?neon

Intel

UMC

Renesas

NXP

TSMC

Qualcomm

Micron

STMicroelectronics

*JCET

*HuaHong

*TsinghuaUnigroup

*SMIC

0510

Source:OECD(2019).Note:*indicatesChinesefirms.

15202530

%ofcompanyrevenues

354045

China’slargestsemiconductorfirmshaveattractedthebiggestsharesofstatesupportsincethetwoBigFundsweresetup.Inparticular,HuaHongSemiconductor,JCET,SMICandTsinghuaUnigrouphavereceivedequityfundingofabout$10billion,whichrepresentsslightlylessthanhalfofthefundingavailablefromthefirstnationalBigFund(roughly$23billion).Thesefirmsareactiveintheindustrialstepsofsemiconductorproduction:fabrica-tionandassembly.

Figure4:Marketsharesofsemiconductorproductionstepsbyfirmheadquarterlocation,2019

USTaiwanChinaEuropeSouthKoreaIsraelOther

100%90%80%70%60%50%40%30%20%10%0%

15%

19%

17%

60%65%

8%

19%6%

53%

13%

Design

Fabrication

Assembly

Source:BruegelbasedonICInsights,SeekingAlphaandStiftungNeueVerantwortung.

3.1Bigsupportandbiglossesinthefabricationsegment

ThebulkofChinesegovernmentsupport,estimatedat67percentofthefirstBigFund7,andoflocalgovernmentsupport,hasbeendirectedtotheconstructionoffoundries(semiconduc-tormanufacturingplants).Although,China’scapacitytofabricatechipshasgrownfast(SIA,2022),therehavealsobeenmajorsetbacks,suchasthebankruptcyofoneofChina’smost

7Seefootnote3.

5PolicyContribution|Issuen?19/22|November2022

importanthome-grownsemiconductorcompanies,TsinghuaUnigroup(seebelow).How-ever,investmentinthefabricationsegmenthasyieldedsomesuccessintheproductionofmemorychips8.Theseachievements,however,areunderwhelmingcomparedtotheobjectivesetforChina’sindustrialpolicyforthesector,namelytobecomeself-sufficientinthehigh-end,smaller-node,chips9.

Anotherimportantdevelopment,againstthestatedobjective,istheincreaseinstateparticipationinkeyplayersinthesector.TsinghuaUnigroupandCXMTarestatecontrolled,andstateparticipationinSemiconductorManufacturingInternationalCorporation(SMIC),China’sbiggestchipcompany,hasalsoincreased,frombelow15percentin2004toover45percentasof2018,muchofwhichwasfundedbythetwoBigFunds(OECD,2019).

Moreover,Shanghai’slocalgovernment,togetherwith$1billioninfundingfromthenationalBigFunds,setupajointventurewithSMIC10tobuildafoundryinShanghaifocus-ingonmid-sizedchips,namely14nmones.In2021,SMICalsoannouncedplansforanewfoundryinShenzhen,basedona$2.35billionjointinvestmentwiththelocalgovernment,fol-lowingthesamemodelastheShanghaiplant.Thankstosuchmassiveinvestments,SMIChasbecomethefifthbiggestplayerglobally11.However,thecompanyisontheUSEntityList(seesection1)meaningproductionupgradesaresuspended.SMICcannotbuyfromkeycompa-nies,inparticularASML,aEuropeanproduceroflithographyequipment,whichisnecessaryforthefabricationofhigh-endsmallestnodeschips(below14nm)(NSCAI,2021).

TsinghuaUnigroupbecameanintegrateddevicemanufacturer,orfirmthatbothdesignsandfabricateschips,afteritacquiredin2013twoofthefourleadingChinesechipdesignersfortheequivalentof$2.1billion.ThefirmalsocollaboratedwithlocalgovernmentsandtheBigFundstoinvestintheconstructionofatleastfourfactoriesproducingmemorychips(OECD,2019).However,inJanuary2021,TsinghuaUnigroupdefaultedonseveralbondrepayments,amountingto$3.6billion.Thecompanycontinuestostruggletogeneratepos-itivecashflowsandremainshighlyindebted,makingitagoodexampleofafirmreceivinghugepublicfundswithoutabsorbingthemsuccessfully.

Anotherlargegovernment-controlledchipcompany,WuhanHongxinSemiconductorManufacturingCo(HSMC),foundedin2017,hasbenefittedgreatlyfrom$1.2billioninfinancialsupportfromtheWuhanDongxihudistrictgovernmenttoproduce7nmand14nmchips12.However,theprojectwassuspendedin2019followingapaymentdefaultandwasabandonedin2021.

3.2Chipassemblypolicysuccesses

Notwithstandingfailedcompaniesandlotsofmoneyspentinotherareas,Chinesecompa-nieshaveexpandedrapidlyintheassemblyofchips(Figure4).Butthisis,byfar,theleast-de-mandingphaseinthesemiconductorcycleintermsofcapitalexpenditureandknow-how.ThelargestChineseplayerisJCET,thirdgloballywithamarketshareof14percent(PoitiersandWeil,2021).JCET’sacquisitionofSingapore-basedpackagingandtestingfirmSTATSChipPAC,instrumentalinJCET’ssuccess,waspartlyfinancedbytheBigFundin2015,raisingstatecontroltobetween20percentand35percent(OECD,2019).

8Memorychipsaresemiconductorsusedfordigitaldatastorage.Logicchipsprocessinformationtocompletetasks.

9Seefootnote6.

10BloombergNews,‘TopChinaChipmakertoInvest$8.9BillioninShanghaiPlant’,3September2021,

https://www

.

/news/articles/2021-09-03/top-china-chipmaker-to-invest-8-9-billion-in-shanghai-plant

.

11ChePan,‘Shanghai’sSMICleadsChinesefoundriesinmarketsharegrabamidongoingchipshortage’,SouthChinaMorningPost,3June2021,

/tech/tech-war/article/3135904/shanghais-smic-leads-

chinese-foundries-market-share-grab-amid-ongoing

.

12HuiTseGan,‘Outofbargainingchips:InsideHSMC’sbillion-dollargrift’,KrAsia,10February2021,

https://kr-asia.

com/out-of-bargaining-chips-inside-hsmcs-billion-dollar-grift

.

6PolicyContribution|Issuen?19/22|November2022

3.3Somestridesindesign,drivenbytheprivatesector

PossiblyanevenmoresignificantisthestridestakenbysomeChineseprivatecompaniesspecialisinginchipdesign.China’sglobalmarketsharegrewfrom5percentin2010to15per-centin201913.ButMainlandChinaremainsbehindTaiwanandfarbehindtheUSinglobalmarketshare(Figure4).Furthermore,China’sdesignsectorhastakenahitsince2019asitishasbecomeexposedtoUSsanctions.HiSilicon,Huawei’ssubsidiaryandChina’sbiggestchipfab,hasbeenunderUSsanctionssince2020,resultinginthecancellationofitsfabri-cationcontractwithTSMCandleavingthefirmunabletogetitsmostcutting-edgedesignsproduced.Intheupstreampartofthevaluechain,ChinaalsoremainsexposedtoUStraderestrictionsandUSfirmsremainmarketleadersindesignsoftware.

4GeneralconclusionsonChina’sindustrialpolicy

Becauseofitsstrategicimportanceandcapital-intensity,Chinahaspouredhugeamountsofmoneyintodevelopingitssemiconductorindustry.ThechallengesposedbyUSexportre-strictionshavebeenafurthertriggerfortherapiddeploymentoffundsintotheindustry.Theobjectiveisclearlyambitious:reachingself-sufficiencythroughtheriseofnationalchampi-onsinthedifferentstepsofsemiconductorproduction–design,fabricationandassembly.

Theobjectivehasbeenachievedforthelastpartofcycle,assembly.Thishashowevertheleastvalueaddedandistheleaststrategicallyimportantofthethreephases.Intermsoffabri-cation,producingstandardchips,especiallyformemorycards,hasbecomefeasibleinChinabuttheseareclearlynotthehighest-endchips.TheavailabilityoffundsforChinesecompa-niestoassemble–andinsomecasesproduce–low-endchipsand,inparticular,memorycards,hasresultedinovercapacityandthecollapseofprices.Furthermore,exportrestrictionsonsoftwaredesignormanufacturingequipment,imposedbytheUSandsomelike-mindedcountries(suchastheNetherlands),aremakingitevenharderthanitalreadywasforChinatomoveuptheladder.

Allinall,andtakingintoaccountthemassivefinancialsupport,estimatedat$150billion,China’sindustrialpolicyofdevelopinganadvancedchipindustryhassofaryieldedmixedresults,atbest.Externalrelianceonsemiconductors,especiallyhigh-endchips,continuesunabated,evenaftertheacquisitionofforeignfirmsandbuildingoffabricationplants.Onereasonforthiscoildbetheincreasinglylimitedroleoftheprivatesectorinthecontextinwhichstatefundinghasincreasedstatecontroloverthesector.Inaddition,companiesreceivingsuchlargeamountsoffundshavenotbeenabletoabsorbthem,andhavebecomeover-leveraged,leadingtodefaultsinthecaseofseverallargecompanies.

Thisdevelopmentisnotunusualinhighly-competitivesectorswheremoneycannotbuyupgrades.Indeed,thesemiconductorsectorischaracterisedbyahighlevelofspecialisationandconcentration,withtheUShavingleverageoverseveralofthekeybottlenecksintheproductionprocess.AlongwiththeUSexportcontrolsitfaces,Chinaislimitedinitsabilitytosecureproductionofhigh-endchipsbyshortagesoftalent.Chinahasnotsucceededinachievingitsveryspecificobjectivesandtimelineforbecomingself-reliantandbypassingtechnologicalbarriers.

ButmoretimewillbeneededforafullappraisaloftheoutcomesofChina’smassiveinvestmentsinthesemiconductorindustry.Chinabegansupportingitssemiconductors

13JoelHruska,‘ChineseChipDesignersCan’tMeetMandatedGoalsWithoutUSTechnology’,ExtremeTech,26June2019,

/computing/293932-chinese-chip-designers-cant-meet-mandated-goals-

without-us-technology

.

7PolicyContribution|Issuen?19/22|November2022

sectorin2014,givinglessthanadecadeforwhichapreliminaryevaluationcanbedone.Sofar,China’sambitiouschipindustrialpolicyhascertainlygrownitsdomestichigh-techeco-systemandsecuredsomemarketpresenceinthefirststepsofthevaluechain.Butitremainsshortofitsoverblowngoalsofmasteringthemosthigh-techsegments.

Thecurrentstateofthemarketreflectstheserealities.Indesign,theUSisdominantandleveragesexportrestrictions.Chinahasnotmanagedtobecomeself-reliant,althoughstrideshavebeenmade,possiblythankstothegreaterroleoftheprivatesector.Inthefabricationsegment,Chinaremainsconfinedtomaturetechnologies.Inassembly,whichisbothlesscompetitiveandlessstrategic,Chinahasmanagedtoincreaseitsglobalmarketshare.FortheChinesegovernment,theUSsanctionsregimeinthechipssectorrepresentedanopportunityforanalignmentofinterestsbetweenprivateandpublicentities14,asbothaimtoshedreli-anceontheUS(Duchatel,2021).However,Chinahasnotmanagedtoovercomethebottle-necksandmonopoliesofcompaniessuchasASMLandTSMC.Thesehigh-techbottlenecksaresettoendureinthemediumtolongterm,makingfullsupply-chaindecouplingimpossi-ble.Thiswillbeespeciallythecasewithnewsanctionshittingthesector,intheformofbansonexportstoRussiabythelargestsemiconductorproducersglobally,exceptthoseinChina(Marcusetal,2022).

8

5LessonsfortheEU

TheEUsharesChina’sambitionofincreasingitschipproductioncapacities,especiallyinthecutting-edgesegments.ThishadledtoarethinkingofEUindustrialpolicy,makingitmoreactive,atleastforthiscriticalsector.TheEUChipsAct,proposedinFebruary2022bytheEuropeanCommissionwithapromisetomobilisemorethan€43billioninfunding,aimstoreducesemiconductorsupplyshortagesandreverseyearsofdeclineinsemiconductorinvestmentintheEU.Inparticular,theproposedEUChipsActisexpectedtoboostEurope’sshareofglobalchipproductioncapacityto20percentfromthecurrent10percentoftheglob-alchipsvaluechain.Meanwhile,theUSfinalisedinAugust2022theCHIPSandScienceAct,with$52.7billionoffundingtoincreasetheproductionofchipsintheUS.

TheseEUandUSinitiativescanbeconsideredcommensuratetoChina’stwoBigFunds(whichprovidetheequivalentof$60billion),althoughmorefinancialhelphasbeenofferedbylocalgovernmentfundsinChina.However,thestartingpointsaredifferent.TheUSleadsthedesignpartofthechipvaluechain,whichhasthemostvalueadded.Europehassomedesignfirms,butmuchfewerthantheUS.Europealsohasimportanttechnology–especiallyonlithographyforthefabricationphase–andhasarelativelystrongpositioninsom