For this company, the investments in Asia are primarily driven by low labour costs and the proximity
to its major customers. The company has installed most of its back-end production in Asia, as this
allows for easy shipping of the end products to the customers. Most front-end production is done in
Europe, where generally also new technology is implemented first. This pattern of regional
localization of production is part of a global corporate strategy, which until now has not been
decisively influenced by government incentives. For that reason, concrete examples of market
distortions for KETs investments cannot be pinpointed for the investments made by this company.
However, the competitive pressure is increasing. From its practical experience, the company finds
that there is not a level playing field for EU companies, as governments from major non-EU
countries are much more active in supporting their domestic industry. Therefore the company calls
for an altered EU attitude towards government support. For example, one improvement would be to
increase the percentage support at the starting phase of the pilot plants from 15% to 25%. A
second improvement would be to expand the types of capital expenditures eligible for government
support with equipment costs. A third improvement would be to reduce the time needed to handle
investment dossiers. All these elements would, in this company’s opinion, be a major step forward
in maintaining the competitiveness of the EU semiconductor industry.