Chips, also known as integrated circuits or microchips, are small semiconductor components that contain millions or even billions of transistors. These transistors work together to perform various electronic functions.
Chips are mostly made of silicon and are widely used in modern electronic devices, including computers, smartphones, cars, and many other devices. The small size and growing computing power of chips enable the creation of compact and efficient electronic devices.
The applications of chips are very broad. They are used in computer and smartphone processors (the “brains” of devices controlling all functions), memory and storage devices, sensors, communication devices, and in many other applications. For example, in the automotive industry, chips help control engine operation, safety systems, and entertainment systems. In the medical field, chips are used in diagnostic equipment and medical implants. The versatility and ability of chips to perform complex tasks make them an inseparable part of modern technology.
The value chain of the chips industry consists of the following parts:
Estonia’s main potential in chip development lies in the areas highlighted in green above:
- Development of chip design software
- Chip design, both as subcontracting for chip customers and as new intellectual property (for example, for end-product manufacturers)
- Chip design for in-house products
- Chip packaging and testing
In the broader value chain, Estonia is also represented in the assembly of printed circuit boards and the manufacturing of end products.
Although the most prominent part of the “chip industry” is the chip factory, none are currently planned for Estonia, since building them is expensive and typically the domain of only a handful of companies (such as TSMC in Taiwan, Samsung in South Korea, or Intel in the USA).
Even though Europe’s chip sector is currently lagging behind Asia and the USA, the goal of EU initiatives is to significantly increase Europe’s share of the chip value chain from about 10%. Europe currently has an important market share in chip fabrication equipment (lithography tools), where the Dutch company ASML is the global leader.
European companies are also leaders in chip design software. Considering China’s investments in the chip sector, Taiwan’s politically complex position, recent US protectionist measures, and, on the other hand, the ever-increasing demand for chips due to technological progress, further development of the sector in Europe is crucial to achieve greater technological sovereignty.