Europe’s quest for ‘industrial sovereignty’ has gone horribly wrong - Northvolt
The semiconductor renaissance is going nowhere.
The lynchpin was supposed to be a €30bn project by US chip giant Intel to build two world-class “fabs” near Magdeburg in eastern Germany, a third paid for by German taxpayers
Intel should have started construction in early 2023 but was held back by wrangling over state aid and by surreal disputes over a neolithic burial site
The company said on Monday that the whole project – and another site in Poland – is on ice for another two years.
Europe produced a quarter of the world’s chips in 1990. This has since fallen below 10pc.
Almost none of it is at the cutting edge below 10nm.
The EU has passed its own Chips Act, pledging a non-existent €43bn to capture 20pc global share by 2030.
True funding at the EU level is just €3.3bn, and some of that comes from cannibalising Horizon Europe (science).
Europe’s electricity prices are 158pc higher than in the US on average, and large fabs consume 100 megawatt per hour each.
It is surprising that Intel was ever tempted.
Europe’s other grand plan for battery gigafactories is scarcely in better shape. BMW has cancelled a €2bn order for lithium battery cells from Sweden’s Northvolt, Europe’s best-funded tech start-up and the great hope of the car industry.
It could not deliver the cells in time. The contract will go to Samsung SDI in Korea.
It bet on standard NMC batteries made with nickel and cobalt just as China switches to cheaper and safer lithium iron phosphate (LFP) batteries for the mass market.
The Swedish state has refused a state rescue, leaving the company in talks with creditors.
Such are the woes of the meteor once billed as Europe’s new Airbus.
Mario Draghi, economist and former Italian prime minister, is right to call for a double Marshall Plan of €800bn a year in extra investment to make Europe fit for the 21st century.
But to do that the EU needs its own Hamiltonian treasury with the full borrowing powers of a unitary state.
Such a Europe does not exist.
Either the EU grasps the nettle and goes the whole way with radical treaty change or, more likely, given the political currents in Germany, it devolves economic and legal power back to the nation states.
The hybrid status quo is demonstrably failing.
Ambrose Evans-Pritchard Telegraph 18 September 2024
Kommentarer