Semiconductor sector in Greece

Electronics Technical ArticlesSouth-East European INDUSTRIAL Мarket - issue 2/2024 • 04.06.2024

Semiconductor sector in Greece

Semiconductors are the fundamental building blocks of every electronic device we use on a daily basis – from smartphones to driverless cars to the newest artificial intelligence applications. They have emerged in recent years as one of the key pillars of the modern electronic industry. Experts in the field predict that microchips will continue to play a major role in the development of electronic devices in the future. Nearly all electronics, no matter their size, today gather and process data in order to offer services to their users. Usually, this processing calls for a number of microchips, each with a specialized function.


In this regard, the global digital transformation is significantly fueled by the semiconductor chip industry. Given that all advanced technology chips are produced almost exclusively in Taiwan and Korea, Europe today realizes the vulnerabilities of their dependence on foreign markets for these precious resources, following supply chain problems brought on by pandemics, and implements legislation to stimulate domestic production.

The EU Chips Act, enacted by the European Union in April 2023, allocates EUR 43 billion to boost microcircuit output in Europe from 8% now to 20% by 2030. The majority of the investments made under the Act, roughly EUR 32 billion, will be used to entice foreign businesses to make investments in the industry. As a member of the EU, Greece intends to use the Chips Act to further reinforce its competitive edge and establish itself as a global hub for microcircuit design, despite the fact that the country’s ecosystem of microcircuit businesses is relatively small and virtually entirely focused on chip design.


Opportunities in the sector

According to the Semiconductor Industry Association (SIA), the worldwide market for microchips was valued at USD 550 billion in 2021 and is projected to grow to USD 1 trillion by 2030. Communications, including mobile devices and network infrastructure (32%), computer infrastructure (31%), consumer electronics (12%), industrial (12%), and automotive (12%) are the main client segments for microchips. In real terms, sectors like industrial production and automotive, which were formerly dominated by analog and mechanical technologies, are now growing at the most rapid pace.

It appears that significant measures towards the development of a strong local semiconductor sector are now being taken in Greece, during a period when the chip shortage of the preceding months and years has set Europe on the path of further expansion of this industry. The local Ministry of Development aims to activate mechanisms for funding ventures and businesses in the sector as soon as possible.

Greece is already witnessing the growth of a highly skilled semiconductor design ecosystem. There are at least 15 companies, ranging in size from startups to major multinational corporations’ software design and development centers, based in the country, which employ more than 500 specialized integrated circuit design engineers. Most of these businesses are engaged in the design of advanced high-frequency chips, such as RFICs and mm-wave ICs, for use in 5G and 6G wireless communications applications. Others create design tools, GPU and video IP circuits, sensors utilizing MEMS technology, and mixed analog-digital reading and processing circuits for industry 4.0 and Internet of Things applications.

According to the International Trade Administration (ITA), securing qualified workers for the employment of high-tech enterprises is a requirement for the continued growth of the domestic ecosystem and the attraction of significant foreign investments. Greece possesses outstanding human resources, with a significant number of specialists having specialized experience in the design and development of integrated circuits and sensors. This gives the country a strong competitive advantage. Over 500 more specialist scientists are expected to be required in the next five years to keep up with the expansion of Greece’s local chip sector, ITA informs.


Further plans for growth

To attract new investments in the semiconductor industry and put together stable chip manufacturing, the local ecosystem must continue to evolve and grow, experts point out. As per the Hellenic Emerging Technologies Industry Association, it is imperative for Greece to allocate strategic resources towards the establishment of prototype production line pilots and the acquisition of infrastructure for wafer-level packaging and characterization. The development of a resilient microcircuits value chain will make it possible to acquire the presently unavailable talents. Greece has made significant efforts in the last couple of years in the digital domain, and the country has a good chance of creating a new semiconductor supply chain, ITA experts underline.

“The Greek government has announced plans to create a technology hub in Athens, which would include a focus on microelectronics and semiconductors. Additionally, there are initiatives to support startups and entrepreneurship in this field, including funding and mentorship programs”, the trade administration’s current report also says.

Since the Greek government has substantial background in this field, both in terms of universities and the developing business environment in the sector, it intends to promote a long-term action plan for further development including all stakeholders. The government will boost capacity building in the upcoming years, according to the local Ministry of Digital Governance, by utilizing financial tools provided by the EU Chips Act and existing national and European resources, analysts conclude.


Is Greece able to become a growth driver

The Association of Informatics and Communications Companies of Greece (SEPE), points out that with a share in global semiconductor production that falls short of 10% and with international competition intensifying, the European Union is attempting to accelerate its investment pace in the critical area of microchips. The semiconductor market is expected to increase significantly until the end of the decade and the main sectors driving this expected future expansion are the automotive industry and the Internet of Things.

Specialists from the Association of Greek Emerging Technologies Companies (HETIA) further emphasize that having in mind that Europe has committed to investing over EUR 40 billion in this field, today Greece has a rare chance to establish the domestic semiconductor industry through targeted investments and initiatives that will have a major positive impact on the national economy and development.

It takes years, substantial financial commitments, and stability for a nation to build a resilient microprocessor industry, HETIA experts point out. In this regard, Greece has been actively developing and becoming more and more stable recently. The country has significant chances to gain from the European Chip Act, which might be particularly helpful in the areas of expertise and labor sharing, allowing it to avoid having to develop everything from the ground up. There are expected to be excellent chances in this field if the local governance takes advantage of Greece’s excellent human potential in conjunction with the current economic and market conditions, specialists comment.

A serious issue to be addressed though, experts underline, is the staffing problem, which is global and recognized. Substantial efforts are being made in Greece to draw talents to this relatively traditional industry, which turns out to be in competition with the rapidly expanding AI sector. Approximately 200 000 people are employed in Europe by the microchip ecosystem, and a few hundred of them are working in Greece. People with experience are scarce in this little environment, and those who do tend to have it either transfer overseas or shift between smaller organizations, start new small businesses, or offer remote services, the branch association elaborates.

However, there is new and highly qualified talent graduating from Greek universities. New waves of young specialists feed the local semiconductor sector every year. Given the limited domestic labor market, in terms of number of positions and range of specializations though, a large portion of talent tends to emigrate. To stop this, Greece needs to continue to heavily invest in the further development of the local semiconductor sector and ecosystem, experts summarize.