The semiconductor industry has played a critical role in Ireland for nearly 50 years. It began in 1976 when Analog Devices founder Ray Stata chose Limerick as the location for a new manufacturing center. In 1986, Maurice Whelan founded Silicon & Software Systems, also known as S3 Group, in Dublin. Soon after, in 1989, Intel decided to establish its first wafer fab outside the US in Leixlip. These major investments signaled to the world that Ireland was excelling in electronics talent, design, and manufacturing.
Today, Ireland continues to thrive in the semiconductor space. Earlier this year, Analog Devices announced a €630m investment in its Limerick campus, and Intel revealed a pan-European investment plan for 2022 that includes Ireland. However, the global semiconductor industry has faced challenges in recent years, such as geopolitical issues, component shortages, and increased investments in emerging technologies that rely on semiconductors. With the industry expected to reach $1 trillion by 2030, Ireland must consider if it is prepared to face upcoming challenges and seize the opportunities ahead.
Dónal Travers, the head of technology, consumer, and business services at IDA Ireland, emphasized that Ireland's strength in the semiconductor sector extends beyond major manufacturing players. He mentioned Qualcomm's investment in a world-leading chip design center of excellence in Cork, where it continues to recruit in areas like digital, analog, machine learning, automotive, CAD, automation, system validation, advanced design for new technologies, and software engineering. Qualcomm joins other leading chip designers and automation tool vendors like Analog Devices, Cadence, Synopsys, Siemens Mentor Graphics, Infineon, OnSemi, ARM, Meta, Qorvo, and Renesas.
However, there are challenges for growth in this sector. Travers highlighted that countries worldwide are actively competing to attract the leading semiconductor companies for research and development, manufacturing, and back-end process capacity. This intense competition means that smaller countries like Ireland must strive harder to showcase their capabilities. Moreover, the rapid growth of the semiconductor industry poses capacity challenges for Europe. Although the EU recently adopted the Chips Act to increase the region's share of global chip production, Europe will need to rapidly expand its construction, fit-out, and operation of wafer fabs. Ireland's previous experience in this specialized task could give it an advantage.
Talent availability is another challenge, as electronic engineering talent is in demand globally. Travers emphasized that the semiconductor manufacturing sector requires significant resources like land, materials, water, and energy. While progress is being made, more efforts are needed in this regard. IDA Ireland continues to collaborate with industry partners across the ecosystem to secure new investments from existing clients and target companies.
In addition to attracting investment and companies, Ireland must also contribute to the broader semiconductor ecosystem by focusing on research and development. Prof Peter Kennedy from University College Dublin emphasized the importance of early-stage research engagement for universities in Ireland. He mentioned the microelectronics center MCCI, which was funded by IDA and Enterprise Ireland a decade ago. MCCI focuses on industry-focused research and the training of circuit designers, acting as a vital catalyst for nurturing the circuit design ecosystem in universities and attracting inward investments. This kind of initiative should continue.
Dr. Giorgos Fagas from Tyndall National Institute stressed the need for R&D investments to stay competitive in the semiconductor race. While competition between countries is inevitable, international collaboration is crucial to ensure a strong semiconductor sector across Europe as a whole. In 2021, Ireland signed the Joint Declaration on Processors and Semiconductor Technologies, committing to work with 21 other member states to strengthen Europe's processor and semiconductor ecosystem, which ultimately led to the EU Chips Act. Analog Devices' recent €630m investment in Limerick under the Important Projects of Common European Interest framework is an example of Ireland's commitment to cross-border collaboration and achieving common technology goals with other leading European companies, resulting in a significant increase in engineering talent and manufacturing footprint.
To maintain its successful track record in attracting foreign direct investment, Ireland needs to continue investing in upgrading its carrying capacity. This includes a strong track record, a healthy talent pool, larger-than-normal manufacturing sites with expansion capabilities, and significant resources at stable price points.
