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By | Rik Myslewski 14th December 2012 06:00

GlobalFoundries CEO: Europe must 'wake up' and help industry

Emphasis on innovation over manufacturing helps Asia, not EU

The CEO of chip-baker GlobalFoundries, Ajit Manocha, believes that European Union bureaucrats – "Brussels," as he refers to them – need to "wake up" or the continent's industrial base will suffer.

"One of the fundamental flaws in [European] thinking [is that] they are focused on innovation. There's no focus on manufacturing in Brussels," Manocha said to reporters at this week's International Electron Devices Meeting (IEDM) in San Francisco.

He told his interlocutors about a meeting that he had in Berlin with "the right people" – whom he declined to identify – during which he discussed the EU's support for industry. "I said, 'Okay, you do focus on innovation, and you're giving support to various companies in Europe for innovation, and if you're not investing in manufacturing, who's going to benefit from innovation? Asia, right?'"

Those unnamed right people didn't directly respond to Manocha's assertion of the error of their ways, but he believes he could discern their response. "I think that their body language was, 'Why didn't we think of that?'"

Chip manufacturing in Europe has been declining, year-on-year, but chip purchasing is still strong, he said, in great part because of auto manufacturing. "The numbers of chips going into a car are very strong – the sensors and the controllers," he said. "That's really helping."

But for the euros spent on those chips to land in European pockets, Manocha believes that policy must change. "The benefit of the European demand will not come to Europe unless ... Brussels wakes up," he said, "[and] comes up with the right kind of partnerships with industries on innovation and manufacturing."

The reason is simple: countries outside the EU offer more support for manufacturing – funding and tax breaks, for example. Manocha mentioned that he finds receptive stateside powers-that-be regarding GlobalFoundries' plant in Malta, New York, and also said that, "if I go to Asia, they will roll out the red carpet for us."

In his opinion, it's time for the EU to join in. "Europe will benefit more if they play a role like the other governments play with us in the other countries, the other continents," he said. "It's a competitive world."

To the reporter who asked the original question about declining chip manufacturing in the EU – who was himself European – Manocha said, "That's really a message that you should take back to Brussels, and I'll be more than happy to join you in that."

And about those bureaucrats in Brussels, "I'm waiting for them to wake up and call – otherwise I'll probably call them." ®

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