Our Digital Future: Strategic focus and action for a smart ... · GLOBALIZATION AND DATA FLOWS HAVE ENTERED A NEW ERA… Source: McKinsey Digital Globalization: the new era of global

Our Digital Future:

Strategic focus and action for a

smart, sustainable, sovereign Europe

DR. SABINE HERLITSCHKA

CHAIR OF ECSEL JOINT UNDERTAKING GOVERNING BOARD

CHIEF EXECUTIVE OFFICER & CHIEF TECHNOLOGY OFFICER, INFINEON TECHNOLOGIES AUSTRIA AG

NOVEMBER, 2018

1

The backbone KETs: central „building blocks“ and enablers for innovation

Globalization, digitalization, „knowledgization“:

Europe can be the best place...

Making it happen: Conclusions

2

INFINEON AT A GLANCE

Focus areas

Energy efficiency

Mobility

Security

IoT & Big Data

Employees

Europe15.650 employees

Around 37.500 employees worldwide(as of Sept. 2017)

Americas3.850 employees Asia/Pacific)

18.000 employees

36 R&D- and 17 manufacturing locations

Revenue

FY 13 FY 14 FY 15 FY 16 FY 17

3,8434,320

5,7956,473

Financials7,063[EUR m]

Market Position

# 2 # 1

Automotive Power Smart card ICs

# 1Strategy Analytics

April 2017IHS Markit,

Technology Group,August 2017

IHS Markit,Technology Group,

Juli 2017

3

INFINEON: WE INVEST IN AND FOR EUROPE

Dresden,

Germany

Villach,

Austria

› New 300-millimeter chip factory:

› Investment 2019-2025: €1.6 billion

› 400 new jobs

› Expansion of 860 jobs in R&D at Infineon Austria

› Expansion of chip manufacturing:

› Investment of a high three-digit million amount over next 3 years

› 300 new jobs

› New R&D Center: 250 new jobs

Despite higher costs for energy, wages and

infrastructure 4





5

DIGITAL FUTURE....WE CREATE IT

6Source: Infineon

SMART MANUFACTURING LIKE THIS...

7

7

Source: Infineon


8

8Source: Infineon


9

9Source: Infineon

SMART MANUFACTURING: OUR EXPERIENCES...

50%

shorter cycletimes

thanks to smart control of processes

10%more productive

without additional

investments in machines

thanks to algorithms for continuous optimization

80%degree of

automation

comparable semiconductor companies achieve 50 percent at the

most

millioneuro1

reduction in energy cost per

yearthanks to automated production planning

Source: Infineon

Digital transformationUrbanization

Climate change & resource scarcityDemographic & social change

GLOBAL MEGATRENDS SHAPE OUR SOCIETY

2050: > 9bn people on earthToday: fossil fuels account for ~ 80% of

energy supply

2020: > 30bn internet connectable devices

11

2030: > 6bn people in cities*

* Quelle: https://www.un.org/sustainabledevelopment/blog/2018/05/68-world-population-projected-live-urban-areas-2050-says-un/

DIGITALIZATION – MORE WITH LESS!

› Energy efficiency: More power with less resources

› Quality of life: More quality of life and security at lower cost

› Prosperity: More access to better and cheaper products through higher productivity

› Mobility: More sustainable movement in narrow spaces

› Working world: More human-like work through cooperation with machines

Digitalization affects all areas of our life and benefits society.

12

DIGITALIZATION AND INNOVATION: WE CAN GROW....

Disruptive Innovation

New: New markets, businesses

Evolutionary Innovation

Upgrade: More/better of same

Efficiency Innovation

Productivity

Lower prices, higher accessibility

stabilize jobs

new jobs

changing jobs

13

SEMIS: ENABLERS FOR THE DIGITAL TRANSFORMATION,

IN EUROPE AND WORLDWIDE

DigitalWorld

Real

World

Microchips

Significant Trends

Worldwide GDP 2017WW: ~$80,000 Billion

Semiconductors

WW

$412 Billion

Electronics 2017

WW: ~$2,000 Billion

Levers

x ~20-

100*

x ~ 5

*Large parts of World GDP enabled by semiconductors; potential of enabled global GDP estimated ~10% up to ~50%

Source of data in the Source of data in pyramid: IMF for worldwide GDP, VLSI

Research for electronics sales, WSTS for worldwide semiconductor revenues.

14

ECSEL:

DEMONSTRATING JOINT EFFORTS AND SUCCESS

15

The backbone KETs: central „building blocks“ and enablers

for innovation




16

KETs ARE ESSENTIAL TECHNOLOGY BUILDING BLOCKS

CREATING VALUE

Source: HLG report June 2011

17

KETs ARE THE CORE OF STRATEGIC VALUE CHAINS

20

20

55

30

33

80

80

45

70

67

PHOTONICS COMPONENTS

SEMICONDUCTOR EQUIPMENT

AUTOMOTIVE SEMICONDUCTORS

EMBEDDED SYSTEMS

ROBOTICS

Europe‘s global Market Share in %

Europe Others

Source: COM(2017) 479 final, 13.9.2017

Source: HLG report June 2011

18

A MORE STRATEGIC VIEW ON TECHNOLOGY AND

INNOVATION IS NEEDED...

Production

Technologies

Digital

Technologies

Cyber

Technologies

Advanced Manufacturing

Technologies

Advanced Materials and

Nanotechnologies

Micro-/Nanoelectronics and

Photonics

Artifical Intelligence

Security

And

Connectivity

Life-Science Technologies

19

EXAMPLE KET SEMI:

EUROPE NEEDS TO TAKE A DRIVER SEAT

Top 20 Semiconductor Suppliers in 2017

62,0 61,4

26,622,8

17,816,9 14,5

11,9 8,9 8,6 8,3 8,2 8,1 7,96,9 6,5 6,1 5,8 5,2 5,1

0

10

20

30

40

50

60

70

Sam

sung

Inte

l

SK H

ynix

Mic

ron

Bro

adco

m L

td

Qual

com

m

Texas

Inst

r.

Tosh

iba

NX

P

nV

idia

STM

icro

West

ern

Dig

i.

Infineon

Media

Tre

k

Renesa

s

Sony

Sem

i

Apple

Anal

og

Devi

ces

ON

Sem

i

AM

D

Asia

Europe

America[US-Dollar Billion]

Source: Based on or includes content supplied by IHS Markit, Technology Group, Annual 2001 to 2017 Semiconductor Market Share / Competitive Landscaping Tool, Q1 2018, June 2018. Information is not an endorsement of Infineon Technologies AG. Any reliance on these results is at the third party's own risk. Visit technology.ihs.com for more details. 20

BEYOND EUROPE:

STRATEGIC & FOCUSED GROWTH: „MADE IN CHINA 2025“

“Made in China 2025”

› Technology from outside

› Own capabilities

› Market demand

› Public money

…may give the strategy“Made in China 2025” significant effects …

Combination of:

21

ARTIFICAL INTELLIGENCE:

U.S. AND CHINA ARE „ON THE FAST TRACK“

22

Source: Visual Capitalist

Source: Visual Capitalist

GLOBALIZATION AND DATA FLOWS HAVE ENTERED A

NEW ERA…

Source: McKinsey Digital Globalization: the new era of global flows March 2016

23

TECHNOLOGY IS NOT NEUTRAL BUT LINKED WITH

DEMOCRATIC VALUES...

USA‘s Way

Source: The Economist

China‘s Way

Source: Merics China Monitor

EUROPE’s WAY?e.g. Europe 2020:

Smart, Sustainable and Inclusive Growth and Jobs24





25

CONCLUSIONS

Digital transformation is more than technology:

economic, political and cultural competition. However, technology will decide

KETs are the new geopolitical „currency“: they are system relevant for strategic value

chains, competitive strength, economic & societal sovereingty and security

A globally competitive European strategy is THE key for this competition.

China and U.S. act strategically! We need to create a strong European way

In practice: MFF with focus on future-oriented objectives (Innovation, Digitalization &

digital infrastructure, Education), HEU: significant budget, KETs (eg ECS, AI) aligned

resources, Missions & KETs, innovation-oriented procurement.

26

27

BOOSTING ELECTRONIC VALUE CHAINS IN EUROPE

Report from Industry to Commissioner Gabriel handed over on 19/06 :

1. Extend Europe’s partnership success model (ECSEL JU: fast track access, synergies & new

applications, AI market readiness & lower TRL )

2. Investment for strong microelectronics manufacturing (eg IPCEI & EU co-funding)

3. Create strategic component sovereignty programme (with EDA, ESA & CS)

4. Create smooth innovation path from IP to Products (facilitate SME & midcap)

5. Pursue strategic design initiatives (OEM – system house – ECS sector)

6. Create design tools for electronics value chains (IP & technology blocs)

7. Create a Task Force for electronics education and skills8. Pan-European research infrastructure for advanced computing technologies

(RTO led)

THANK YOU!

28

Documents

Our Digital Future: Strategic focus and action for a smart ... · GLOBALIZATION AND DATA FLOWS HAVE ENTERED A NEW ERA… Source: McKinsey Digital Globalization: the new era of global