Business from the Finland technology industry Tonimatila of Finland and Junasmickira explains how Finland’s semiconductor and microelectronic value chains can help position the country and transform the European chip industry.
Finland has identified global restructuring of the semiconductor and microelectronic value chains and important growth potential, particularly from the European Chips Act. Chips from the North offers a plan to increase the size by more than tripling within a decade, bringing the industry’s annual growth rate by over 10%.
Finland, coupled with long-term investments in education, research and development, coupled with recent industry transformation and the numerous new deep tech companies established over the past decade, is in a particularly good position to seize this opportunity. there is.
2010S: Time for change and renewal
Since the 1930s, Finland’s electronics industry has been driven by large, globally operated companies such as Sarola, Vaisala, Korn, Stromberg (part of today’s ABB), and Nokia. Over the years, Finland has created a wide ecosystem of suppliers and subcontractors in the late 1990s, covering almost the entire value chain, from production of silicon wafers to manufacturing and assembly of industrial generators and a wide range of final products. It has been developed. Weather sensors for consumer radio, personal computers and mobile phones.
In 2013, Nokia decided to focus on telecommunications networks and leave the mobile phone business behind, unintentionally beginning a major industry change at the national level. In hindsight, this decision would not have been good considering it was stolen by a storm of entrepreneurship a few years ago and was at the height of the startup boom. For this reason, many foreign companies happened to be in Finland. For a while, there was an opportunity for them to hire an entire department and an entire professional team to start a local subsidiary.
The influx of innovative individuals into the market has accelerated the Finnish startup boom. At the same time, Finland’s VTT Technical Research Centre began spinning out companies from internal projects. These events have caused a nationwide change in microelectronic and photonic landscapes. Today, there are nearly 300 companies in the sector. Most of them are small and medium-sized businesses that still have vast growth potential.
Key areas of cutting-edge expertise today
Finland’s strength in the microelectronics industry is rooted in several special domains, many of which stem from past investments in the telecom sector. One of the most important spillover sectors is electronics design, particularly chip design. Today there are over 20 companies specializing in the design of integrated circuits for a variety of purposes.
However, cutting-edge expertise is not limited to design. Additionally, there are several suppliers of advanced materials and processing technologies for semiconductors. This is Atomic Layer Deposition (ALD), the technology required to manufacture the most advanced chip nodes. ALD was originally developed in Finland in the 1970s and has several companies specialising in the development of today’s technology and its applications.
Sensors are another important area of cutting-edge expertise. Specific skills and expertise are associated with microelectromechanical systems (MEMS)-based inertial and environmental sensors, as well as optical sensors. While most of the sensors produced in Finland today are used in the healthcare, automotive and industrial automation sectors, what contributes greatly to the advancement of MEMS technology is the MEMS-based weather monitoring and pressure It is attributed to Vaisala, a company known for its work with sensors.
Photonics is another area where Finland accumulates world-leading expertise, especially due to its contribution to the development of optical sources (lasers), optoelectronics, optical waveguides, and various systems of imaging and sensing. On the horizon there are also optical storage technologies based on nanophotonics and silicon photonics. Finland’s expertise in quantum technology is also worth noting, with several research institutes and companies working on quantum computing, quantum communication and quantum sensing. Finland’s IQM was one of the world’s first companies to make quantum computers commercially available.
Secret Source of Finland’s Innovation: Collaboration
Industrial, academia and public sector collaboration are key drivers of Finland’s innovation. The country’s strong research and development ecosystem promotes a culture of collaboration and enables the exchange of knowledge and resources between trusted partners. This collaborative approach has been proven to accelerate innovation and new product development to a significant degree. This type of wide, large-scale collaboration was a key component of Nokia’s success, for example, during its biggest growth period in the 1990s and early 2000s.
Future possibilities for Finland
Finland’s semiconductor and microelectronics sector uniquely combines important growth potential, positive economic impacts and close ties between EU technology and industrial policy.
The global semiconductor market, which has been provoked more than anything by advances in artificial intelligence (AI), is widely expected to reach around 1 euro by the end of the decade. However, the Finnish chip industry is well positioned to grow faster. The industry will more than triple 5-6 billion euros by 2035 and double its workforce to 20,000 employees, according to forecasts outlined in Finland’s 2024 National Semiconductor Strategy. It’s expected.
The industry strategy identifies six growing regions in Finland, all based on extensive research and education, and world-class products. These areas include: Chip design. Innovation in MEMS and sensors. Photonics; Quantum Technology; Advanced Materials; Sustainable Process Technology.
Global challenges and European responses
The Covid-19 pandemic and ongoing geopolitical tensions have revealed vulnerabilities in the global semiconductor supply chain. Chips are produced in a complex, optimized global network that does not have a single country, region or company that controls every step of the supply chain. In response, governments around the world recognize the strategic importance of semiconductors for national security and economic success, and are committed to key resources to support domestic industries.
The EU labels advanced semiconductors as key technologies within the framework of economic security, highlighting the important role that chips play in the strategic autonomy and competitiveness of the bloc. However, since the early 2000s, chip manufacturing capabilities have declined in Europe and increased reliance on external suppliers. Therefore, the EU’s 2023 chips law aims to double the European global semiconductor market share by 20% by 2030.
Finland will play a large role in revitalizing the European chip industry
Given the industry’s long background and accumulated know-how, Finland could make a significant contribution to modernizing the European semiconductor industry. The country is also expected to make significant profits from both private and public investments in the sector.
However, exploiting growth opportunities requires critical action to meet sector demands for talent and capital investment. The National Chip Strategy promotes the appeal of capital investments in both volume and quality, as well as design and R&D centers and manufacturing facilities, both domestically and internationally .
While businesses are primarily responsible for these initiatives, governments and universities play an important role in achieving their goals, particularly with the aim of reducing time from the lab. To the Finnish government, they have invested a significant amount of investment in the domain by funding EU-backed pilot line infrastructure and chip competence centres that are likely to be online in the coming years.
For the successful implementation of the strategy, close collaboration between the industry and its stakeholders is extremely important, especially in terms of navigating the EU’s involvement and an increasingly unstable business environment. Here, the Finland Semiconductor Branch Group, Business Finland and the local hub technology industry provide an important platform for public and private engagement.
This article will also be featured in the 21st edition of Quarterly Publication.
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