European Commission Launches $12 Billion Chip Support Campaign

An anonymous reader writes "Neelie Kroes, European Commission vice president responsible for the digital economy, wants to use 5 billion euros of European Union tax payers' money, together with matching funds from the chip industry, to recreate European success in semiconductors similar to that of Airbus. Because of its strategic importance to wealth creation Kroes wants Europe to reverse its decline in chip manufacturing and move back up from 10 percent to 20 percent of global production."

Comments

I am willing to go along ...

[pablo_max]

Assuming that what comes out of it is able to be used by ANY EU based (i.e. PAYING taxes here) firm. I think another stipulation to using any of the research money or outcome of said research should be that the firm which is also based on EU, must also produce the resulting products inside the EU. Not spending my money to gain a competitive advantage and then turn around and outsource all production to China or Brazil.
Basically, if we are paying, we better get real benefits.

Re:I am willing to go along ...

[Anonymous Coward]

It's not as simple as that.

Improved infrastructure provides a moderate benefit to a great many individuals and businesses which can add up to a net profit for the country. This doesn't mean that it would have been a good investment for a private company to build the infrastructure, because it is not possible to capture all the value that the infrastructure creates. For example, a toll road operator doesn't get paid for the reduced pressure on surrounding roads, but the users of those roads still benefit.

Similarly, this EU investment may make a net profit for the EU but that doesn't mean a corporation would make a profit doing the same thing.

Or it may be a giant waste of money. But the fact it wouldn't work as a corporation tells us nothing either way.

Re:I am willing to go along ...

[SomeKDEUser]

This is a really dumb way of thinking about how the government spends money. A corporation does not need to make a profit: it needs to make a profit now. And not just now, but also high enough.

Governments are special in that they can finance things which bring in enormous profit in the very long run (fundamental research, very large infrastructure projects) or which have very large positive externalities (free roads). Without governments, you could not build dams: large ones become profitable after 50 years. No bank, no insurance company will accept such long-term risks: they may well not exist that long. Only countries can be reasonably certain of existing within such stretches of time.

TL;DR; it is an essential function of governments to fund long-term, high-risk projects.

Ask IBM why they left . . . ?

[PolygamousRanchKid]

IBM used to produce chips in Sindelfingen, Germany. They shut it down a long time ago. On the other hand, Mercedes Benz automobiles are still rolling off the Daimler assembly line in Sindelfingen. So it's not like it's the location or lack of skilled workers or anything like that.

So why is that . . . ? Of course, cars are not chips, despite the Slashdot penchant for car analogies. But it would be interesting to know why someone like IBM pulled out, before dumping a bunch of money on the problem . . .

And what about Siemens . . . ? Do they still make chips . . . ?