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Europe’s chips research champion is cutting China ties

by editor

BRUSSELS — Belgium-based Imec, a world-leading research center in microelectronics, has soured on China.

Imec has “drastically reduced” its Chinese partnerships, the Flemish Economy Ministry, which oversees the microchips research center, told POLITICO. The research center will continue to phase out ongoing obligations on more mature technology.

Imec’s rollback is the latest example of how “China” has become a tainted word in the chips industry. European governments are closely scrutinizing the contacts that their chip companies have with China — mostly pressured by the United States, which aims to cut off China’s access to advanced chips.

It’s a watershed moment for the microchips industry, which supports everything from the data economy to consumer electronics. The chips supply chain for decades was carved up into highly specialized companies spanning the globe. It depends on global trade for its rapid innovations.

Since its conception in 1984, Imec has carefully crafted the image of a neutral ground, where researchers, chip manufacturers and other companies from all over the world can jointly push for progress on the next generation of chips.

In an interview last month, Imec CEO Luc Van den Hove touted Imec as “the Switzerland of semiconductors,” where all the key players in the industry can come together.

In the past, this stance has led to some high-profile collaborations with Chinese semiconductor companies, such as SMIC and Huawei. Two Imec spin-offs were later even integrated into Huawei: one called M4S in 2011 and another called Caliopa in 2013. In 2015 the research centre teamed up in a joint venture with both SMIC and Huawei.

Asked about its partnerships with Chinese companies, Imec said in a statement it has a “robust, voluntary policy with regard to collaborations with Chinese companies and universities,” based on U.S. export policies and the fact that Imec has a lot of partnerships in the U.S.

“Our policy was further refined in reaction to the global geopolitical developments,” it added.

The region of Flanders subsidizes Imec (for an amount of €134 million in 2022) and has a big say in Imec’s marching order — also through representatives on the board of directors of Imec.

Jo Brouns, economy minister for Belgium’s northern region of Flanders, told POLITICO in November that Imec had to “focus mainly on the like-minded countries” when asked whether Imec should show any caution towards China. Some of the West’s like-minded partners with a chips stronghold are the U.S., Japan, South Korea and Taiwan.

“There is a certain shift that is in there that is being made,” Brouns agreed.

Jo Brouns, economy minister for Belgium’s northern region of Flanders, told POLITICO that Imec had to “focus mainly on the like-minded countries” | Marcel Van Hoorn EFE via EPA

In ASML’s slipstream

The move happens against the backdrop of a U.S.-Chinese tit-for-tat chips trade war, that has caught Europe in the middle. Last year, the U.S. pressured the Netherlands into imposing export restrictions on Dutch chip equipment supplier ASML to China.

ASML is one of the few suppliers globally of printing machines for advanced microchips, and the U.S. considered the company as the perfect chokepoint to cut off Chinese access to advanced microchips.

Imec and the Dutch company are longstanding partners. Last June, they signed an agreement to collaborate on a pilot line with state-of-the-art technology to be based in Leuven, the home base of Imec.

Up until now, Belgian officials have stayed relatively mum about the positioning of Imec in the whole geopolitical boxing match — despite its close ties with ASML.

“Imec will continue to do business with the Chinese, there are just some sectors where they will have to pay a bit more attention,” Belgian Prime Minister Alexander De Croo told reporters during a visit to China in January.

Imec — and its stance toward China — could come under more spotlights relatively soon, as it’s vying for some of the research money that both the EU and the U.S. are planning to dole out as part of their multibillion plans to re-shore some of the microchips production.

It’s to be expected that both the EU and the U.S. will attach certain conditions to their funding, possibly affecting Imec’s partnerships around the world.

It’s a reality check for Imec — one that it is already adapting to.

Camille Gijs contributed reporting.

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