CEOs of European chip makers concerned about nationalist industrial policies

By Toby Sterling

MUNICH (Reuters) -The CEOs of Europe’s three biggest computer chip makers on Monday said that demands by the U.S., Chinese and European governments that each region have its own semiconductor production are a worsening obstacle to business.

In a rare joint appearance following the election of Donald Trump to the U.S. presidency for a second term, the CEOs of Infineon of Germany, French-Italian firm STMicroelectronics and NXP of the Netherlands said their businesses have been suffering from uncertainty and the trend toward nationalist industrial policies seen over the past decade.

“The danger is that we will accelerate in this fragmentation,” said Infineon CEO Jochen Hanebeck at the electronics conference in Munich. “Fragmentation is happening on the supply side, and potentially with tariffs, which are written on the wall, it will get worse”, he said. All three firms are major suppliers of chips used for cars, electrical power controls, and industry.

All are currently doing strong business in China due to the booming electric vehicle market there. Other chip markets around the world are weak, excepting for chips used in artificial intelligence.

STMicroelectronics CEO Jean-Marc Chery said that recreating supply and production chains on separate continents to make “China for China and West for West” chips has been costly in both material and engineering terms. “So. Congratulations to the new U.S. president.” NXP Semiconductors CEO Kurt Sievers said no country will be able to dominate the chip industry or be independent of the rest of the world. “And if it was possible, it would become so expensive that no consumer could afford any device which uses chips,” he said. “And I’m sure every government over time will understand it.”

(Reporting by Toby Sterling; Editing by Leslie Adler)