The past weeks have cemented government’s drive to boost Malta’s semiconductor industry. In my role as CEO at Malta Enterprise, I have never seen so much engagement and excitement surrounding this sector. I genuinely believe that we are on the right track to take this strategic activity to new heights.
By 2030, the worldwide semiconductors industry manufacturing capacity should nearly double. Global geopolitics are significantly influencing the developments taking place in the semiconductor space. A significant share of the world’s production and innovation is concentrated in Asia.
The Chips and Science Act in the US, the EU’s Chips Act and India’s Chip grants are just a few of the many government programmes worldwide that push for increasing capabilities in the respective semiconductors’ scene.
The US was first to act in November 2020. This incentivised and facilitated additional stimulus to production, research, and development of semiconductors in the country.
The European Union took the plunge through the Chips Act establishing ambitious targets to produce around 20% of global output by 2030. The EU currently has 10% of the world market. This Act is a bold legislative package with the aim to strengthen Europe’s semiconductor supply chains, reduce external dependencies and boost its global competitiveness.
The Chips Act has various objectives among which, but not limited to, enhancing further Europe’s resilience in the field of semiconductors also through strategic agreements with like-minded third countries. Since the current EU chips production only represents 6% to 8% of the worldwide capacity, the European semiconductor industry should increase its capacity by a factor of 4 to 5. To ramp up this capacity there is a need to blend public and private financing. Around a year ago, the European Commission issued its first approvals under the flagship initiative of the Important Projects of Common European Interest (IPCEI).
Malta is not a passive onlooker in the unfolding global geopolitics of semiconductors. Realising the economic potential, innovative drive and geo-strategic importance of the technology over the decades to come, Malta Enterprise is embarking on an exciting journey to continue strengthening the country’s semiconductor ecosystem.
For example, the recent visit to ST by Prime Minister Robert Abela and Minister for Economy Silvio Schembri marked a significant endorsement in support of the commitment and projected plans ST has for Malta. ST Malta is the only back-end operation in Europe, with a workforce of 1,800 employees, where around 2.7 million microchips are produced daily. ST is currently upgrading to an industry 4.0 concept which will result in a smart factory where digitalisation and robotisation will prevail.
Furthermore, only a few days ago, Malta Enterprise signed a Memorandum of Understanding (MoU) with IMEC, the world-leading R&D and innovation hub in nanoelectronics and digital technologies. The MoU marks a significant milestone for a country like Malta which signifies the intentions to strengthen this industry.
The chip industry is on a fast train- Kurt Farrugia
Malta Enterprise will implement the MoU by connecting all stakeholders to capitalise on this. Very importantly this will bring together academia, start-up companies and the existing ecosystem. This will result among others in the creation of a cohesive economic fabric ranging from the delivery of training up to the attraction of new investments.
This will serve as an important enabler to attract new companies, upskill our talent and ensure that operations already established can enhance their competitiveness even further. This is the gist of the MoU. It also consolidates the foundation of the government’s interest in the setting up of a Malta Competence Centre which will provide an array of opportunities for the ecosystem.
The Competence Centre, a spin-off of the Chips Act, is also part of our chip strategy. Despite being the smallest EU member state, we still managed to negotiate firmly to have the right to establish a Competence Centre in Malta. We believe that the Chips Act is a very important contributor in enhancing Europe’s footprint within the semiconductor global market. It sets the ambition of investing in competence centres and skills development.
The chip industry is on a fast train. Discussions held with various local and international stakeholders during the past months have clearly indicated that Malta is well positioned to exploit the opportunities in the European and global semiconductor ecosystem. Our enduring investments in the region have also contributed to this outcome. It is imperative that as a country we continue to further build our ecosystem and participate in the future evolution of the semiconductor industry.
Our strategic plans were kicked off with the MoU with IMEC. This will be followed by several exciting initiatives that Malta Enterprise will be leading in the coming months. Such initiatives will also include an international semiconductor conference which is being earmarked for the last quarter of 2024.
This is how we are modernising our country’s economy and creating quality jobs where Maltese and Gozitan students can find employment in the most advanced technology sectors in the world. This is a testimonial of the commitment government has to Malta’s manufacturing industry and showcase our drive and ambition in pushing forward the country’s economic development.
Kurt Farrugia is CEO of Malta Enterprise.