Exploring Openness in the Semiconductor Industry

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Without open source, our technology would be standing on very different grounds today. It is the collaboration within open source that enables a common technological evolution—as it nurtures ideas, innovation, interoperability, open standards and reflection. Most people associate open source solely with open source software (OSS). However, it is not only OSS that is fundamental to technological innovation, but open source hardware (OSH) is also increasingly seen as its strategic enabler. Broadly speaking, OSH can be understood as the design of a tangible computational tool with a documentation base that is publicly accessible, modifiable and distributable.

The European Union and Open Source go together

Let’s take a closer look at technological openness in one hardware industry that is currently widely discussed worldwide and in the European Union: the semiconductor industry. Semiconductors—also referred to as integrated circuits (IC) or chips—are at the base of electronic devices. Silicon being traditionally the primary material for semiconductors is the reason why the US’ tech hub is called “Silicon Valley”. Without chips, most of today’s technological progress would not be happening. Therefore, semiconductors are to be understood as a foundational technology, constituting the building blocks of many advanced technologies, for instance, in the ICT and the automotive sector. The idea of free and open source silicon is that chips should be free and more accessible—precisely because they lie at the heart of all electronic innovation. However, chip manufacturing is not only highly intertwined with intellectual property law but the design and production costs of chips also pose significant barriers to entry. 

The European technology sector has always been closely tied to open source, and open source continues to be seen as a crucial element for the progress of the EU’s digital transformation. However, the need for openness in the semiconductor industry is currently being called into question from the standpoint of technological sovereignty and national security. Due to several disruptions in the complex semiconductor supply chain over the past few years, various vulnerabilities in the supply chain such as its high geographic concentration, and associated strategic dependencies of entire industries were revealed. For example, a large increase in demand for electronic devices combined with the recurrent lockdowns during the pandemic proved problematic. Now there are increasing efforts around the globe to adopt national or regional strategies to reduce dependencies by reshoring design and manufacturing capacities.

The EU is seeking to boost its sovereignty in the area of semiconductors within the motif of open strategic autonomy, since presently the EU has a share of only about 10% of the global semiconductor market and is highly dependent on suppliers from third countries. Accompanied by an investment of € 43 billion, the proposed Chips Act aims to strengthen the European ecosystem and to double the market share of European chips by 2030. 

Even if the geopolitical dimensions might seem challenging for technological openness, the EU recognises its historical links to open source approaches and open source’s strategic relevance. Indeed, the European Chips Act takes openness into account when it comes to strengthening the EU semiconductor ecosystem. For example, it recognises the problem of a lack of fabless chip design in the EU (only 1% of the global share) and points to the necessity of open design projects such as RISC-V. RISC-V is a free and open instruction set architecture (ISA) initially developed at the Berkeley University. The open standard is a promising alternative to the closed ISAs of x86 and ARM. It enables a significant reduction in barriers to entry in processor design and has been embraced by companies around the world. Semico Research predicts that by 2027, there will be 25 billion RISC-V based artificial intelligence systems-on-a-chip (AI SoCs) on the market.

Since the development of chips requires a great effort in research and development (R&D) and is very expensive, the EU’s focus on openness seems to be a clever move. Besides, the notion of “open foundries” certainly holds at least a trace of openness as it implies an enhancement of the interoperability in manufacturing processes in Europe, speeding them up and strategically stabilising them. This, however, is not an easy endeavour, because the fabrication of chips is highly specialised insofar as individual manufacturing processes are specific to particular chips. Moreover, the construction of a single fabrication plant (fab) often costs more than  $ 15 billion.

What is already open in the semiconductor industry?

Nevertheless, it may be useful to take a closer look at what is in fact already open in the semiconductor value chain in order to assess the potential at hand. For the first step of production just mentioned, chip design, engineers rely on electronic design automation (EDA) software, which is dominated by three U.S. providers: Cadence, Synopsys and Mentor Graphics (acquired by Siemens). Their oligopoly is increasingly being challenged as other companies adopt open design strategies to lower the barriers to entry for chip design, for instance by releasing open source Process Design Kits and tools. Similar to RISC-V, the hope is to target a wider audience by OSH initiatives such as OpenROAD. In this way, chip design, which in the past has been mainly covered by hardware engineers, could be increasingly opened up to software engineers—thereby fuelling innovation through the growth in talent.

Since chip design is only the first of three main steps in semiconductor production—the designed chips must then be fabricated before they are finally assembled, tested and packaged (ATP)—easier access to fabrication is indeed an essential concern. Obviously, not every creative mind has adequate resources to actually take a designed chip into production. Not only does it take three to six months to produce a single chip, but it is also very expensive, requiring several hundreds of processing steps and highly specialised equipment. To still find enthusiasm for their initiatives, companies are trying to work around this access barrier by, for example, collaboratively taking over the fabrication of the designed chips, including the associated costs.

So, even if there are barriers to openness in the semiconductor industry, open source is still critical for the European chip strategy. Not only can OSH communities significantly extend the pool of talent, but also can the costs associated with the design step be significantly reduced in the long term. Altogether, it is fair to say that open source can be a game changer in the world of chips and support EU’s digital sovereignty goals. 

In the upcoming year, OFE will work on these topics in the context of a soon-to-be-announced project within the Digital Europe Programme framework.