By John Durcan, Senior Technologist for the Emerging Business & Technology Division of IDA Ireland
The digital transformation that continues apace worldwide will increasingly depend on a supply of integrated circuits but the always-fluctuating semiconductor industry must first get past the challenges of 2022 and the shortages and supply-chain issues that are now lowering near-term predicted growth. Gartner noted that the global semiconductor market is contracting for the first time in four years – although it will still increase – reaching $596 billion in 2023. Deloitte’s 2023 semiconductor report also sees some shrinkage in forecasted growth but views the 2023 pause before the next chip boom cycle as an opportunity for both American and European semiconductor companies to begin implementing an historic shift that involves bringing manufacturing closer to home.
This about-face was underscored by twin “chips acts” launched last year in America and the EU that commit billions of dollars and euros to rev up domestic semiconductor production in both regions. Behind this news-making shift is the reality that the key tech growth areas coming along – AI, VR, AR, IoT, autonomous vehicles, high-performance computing, 5G/6G, smart cities, health tech and much more depend on advancements in semiconductors.
The U.S. and EU semiconductor supply chains are deeply intertwined and the two geographies collaborate in many areas while also having similar objectives of boosting domestic production. Thus it’s no surprise that some American chip companies are addressing their future needs by joining forces with EU partners, investing in new manufacturing and product research activities located there. Ireland, in particular, is the choice of a growing line-up of firms due to the availability of talent, reputation of research centers, business-friendly tax environment and long track record of hosting top U.S. chip companies like Intel, Analog Devices, AMD, Qualcomm, Texas Instruments, Synopsis and many more. Meanwhile, these synergistic efforts help expand the Irish business sector, which is usually the fastest-growing in Europe.
Since capital investments are costly in the semiconductor industry, American companies want to focus on locales where the risks are lower. For example, Boston Scientific has an Irish operation that is working on implantable medical devices that utilize Application Specific Integrated Circuits that target biomedical therapies. The company is collaborating with the Microelectronic Circuits Centre Ireland (MCCI), a national technology program that links to eight top Irish research centers and teams with companies on breakthrough products.
MCCI collaborated on microelectronic research with Boston Scientific “to solve key challenges for medical technology applications and develop a very specialized set of electronic circuits,” said John Morrissey, MCCI executive director. The research technology was jointly developed and deemed a great success. “Boston Scientific then licensed the IP developed from the center, allowing Boston Scientific ownership to develop it further and commercialize it,” he explained. Besides linking companies with world-class circuit design researchers, cutting R&D risk, time, and making IP ownership available, MCCI provides other benefits. “Ireland is English speaking, with favorable conditions for companies setting up in here,” he noted. “A major attraction is funding aid for research and access to an ecosystem here of suppliers, industry standard tools and equipment.”
Finding skilled IC circuit designers is an ongoing challenge for U.S. tech firms, so another plus for MCCI’s Industry partners is accessing skilled talent, Morrissey said. The companies with very active product developments in their Irish operations “establish a connection that allows access to student graduates and post graduate researchers – and we produce quite a large number every year. That’s world-class IC design talent that can be quickly developed even further to become technology leaders in any company they join.
Ireland’s rich talent pool was also an attractor for California-based Ultra-Clean Holdings (UCT), maker of ultra-high-purity cleaning and analytical services for the semiconductor industry. Last year, UCT began building a 57,000-square-foot Advanced Technology Cleaning Centre that will support Intel and other semiconductor suppliers with Irish operations. UCT is hiring 100 new positions for the center, taking advantage of Ireland’s 7,000 STEM graduates annually.
There are other American semiconductor players benefitting from local engineering talent and Irish funding programs while establishing advanced development centers there. Opening and staffing such centers is a reminder of how U.S. semiconductor companies are looking to new solutions as a key aspect of expanding their domestic operations – even if the actual work is done at European facilities.
Such firms include:
- Arizona-based Microchip Technology, an integrated circuit supplier that has plans to add about 700 jobs over the next few years to its new Irish development center.
- In 2020, a multimillion-euro four-year investment by Qualcomm was announced that includes specially designed labs that enable what the company defines as “ground-breaking security and validation work.
- Analog Devices is spending €100 million over the next three years on ADI Catalyst, a 100,000-square-foot, custom-built facility for innovation and collaboration. The center is a collaboration accelerator where ecosystems of customers, business partners and suppliers engage with Analog Devices to rapidly develop industry-leading solutions.
Besides new advanced development centers, some American IC firms are enlarging their Irish manufacturing facilities, such as Intel, one of the semiconductor world’s biggest investors in Ireland. The company is expanding its manufacturing facilities in Leixlip, Ireland, for new process technologies and bigger foundry services, bringing its total investment there to more than €30 billion.
The local talent, abundant R&D options, funding opportunities and critical mass of companies, suppliers and customers have helped position Ireland as a strategic resource for U.S. firms determined to reinvent and grow their semiconductor businesses by investing in domestic and domestic-aligned programs. This new “home-grown” focus is rewriting the future history of the industry and will help it thrive.
John Durcan is senior technologist for the Emerging Business & Technology Division of IDA Ireland.