The semiconductor sector is central to Malta’s strategic objectives of bolstering its economic resilience in the manufacturing sector while nourishing new vigour into yet another high-value-adding economic activity.
The 2024 Budget’s reference to the microchips industry is a clear statement that manufacturing and technological advances go hand in hand and remain important pillars of our economy.
Malta Enterprise is taking a leading role in ensuring that Malta is part of the global technological race which is shaping the future.
This is being done mainly through Malta’s participation in the EU’s Important Projects of European Interest (IPCEI) for semiconductors and communication technology, in partnership with ST Malta. Malta Enterprise took an active role in the negotiations leading to the drafting of the EU’s Chips Act. This led to our push to set up a microchips competence centre in Malta, which will open new important opportunities to attract main industry players, academics, disruptors and innovators in such a crucial global strategic sector.
At a European level following the COVID-19 crisis, coupled with the current geopolitical realities, there has been a drive to push forward the concept of ‘open strategic autonomy’. In other words, the European Union needs to remain open to international trade and investment while ramping up investment within the EU critical areas of its manufacturing and services supply chain.
One of the first tangible dossiers that pushed the concept of open strategic autonomy was that of the European Chips Act. Within the Maltese perspective, this act, in tandem with the participation in the IPCEI, was a critical building stone to push forward the EU’s strategy while benefiting from new investment opportunities. Malta’s participation in the second IPCEI was certainly an important game changer because we are now part of the member states that have reached this frontier.
The recent review of the EU’s IPCEI framework and the establishment of a forum between member states open new opportunities for SMEs to participate in IPCEIs. The new format is less cumbersome and thus makes IPCEI more accessible to SMEs. This move is welcomed by Malta especially since SMEs are central to Malta’s and the EU’s sustainable growth. They have a pivotal role to drive the twin green and digital transition.
Malta has been involved in the European semiconductor sector for over 40 years. Our participation in the IPCEI is going to bring about a significant investment through the implementation of a beyond-state-of-the-art Industry 4.0 project that places digitalisation and sustainability at the forefront.
Nowadays, the Maltese semiconductor ecosystem involves several enterprises, employs around 1,800 individuals and exports over €600 million annually. Our semiconductor sector is very much linked with European and global value chains involved in the automobile and telecommunication activities.
With the drive towards clean tech and net-zero technologies, we needed to ensure that our manufacturing sector is engineered to service these growing market value chains – for example catering for electric vehicles. Furthermore, we need to diversify further to increase our resilience by venturing into new high-growth niches within this sector.
Maltese semiconductor ecosystem involves several enterprises, employs around 1,800 individuals and exports over €600 million annually- Kurt Farrugia
During the discussions on the Chips Act within European structures, Malta Enterprise insisted on several key points that are crucial for the Maltese semiconductor ecosystem, three of which being that each member state gets access to funding to establish a competence centre; for financing available under the EU Chips Act to cover both modernisation of current and new facilities; and finally for compliance costs to be kept in check for our industrial operators.
As announced in the budget, Malta Enterprise is currently carrying out the necessary background for the establishment of a semiconductor competence centre.
This centre will be crucial to consolidate and develop further the present semiconductor eco-system as well as to enable the development of new niches. Already this week, Malta Enterprise met the relevant EU institutions on this matter with follow-up meetings at DG Connect and with separate engagements with IMEC, the world-leading R&D and innovation hub in nanoelectronics and digital technologies.
The centre will focus on the skilling and upskilling of current and future workforce, and it will act as a catalyst for industry-relevant research. It also aims to assist Maltese start-ups and SMEs and the attraction of FDI, and enhance the cooperation between industry and academia. As per innovation, the centre shall develop new areas including the attraction of fabless chip design companies and facilitating their access to European infrastructure.
Finally, it will focus on cultivating competences in chip integration and advanced packaging. This aims to create synergies with the IPCEI project as it is the vision of the Maltese government to future transform Malta into a centre of excellence around back-end operations.
Kurt FarrugiaMalta Enterprise will continue to support the current players, new SMEs and start-ups that can be attracted to this stream and, as Malta’s economic development agency, help spearhead Malta’s industrial transformation.
Kurt Farrugia is CEO of Malta Enterprise.