Mikroshēmas attēls

At a Cabinet meeting on October 1, 2023, after reviewing the report "On Latvia's Opportunities in the Development of Semiconductor Technologies," prepared by the Ministry of Economics in collaboration with the Ministry of Education and Science and stakeholders from Latvia's semiconductor sector, it was decided that Latvia will participate in the Horizon Europe competition to establish a National Microchip Competence Center (KC). In the event of a successful outcome, the state will allocate co-financing of €744,704 per year for a four-year period starting in 2025 to support the establishment and operation of the National Microchip Competence Center under the EU joint venture “Chips.” Riga Technical University (RTU) will prepare the competition application.

Several National Microchip Competence Centers will be established across the EU, aiming to serve as one-stop access points for technical expertise, skills, and experimentation in the microchip field, as well as to provide access to the infrastructure developed by the joint venture “Chips,” including the virtual chip design platform and pilot lines. These competence centers will provide services to semiconductor ecosystem participants, especially startups and SMEs, and will be integrated into the European network of semiconductor competence centers, facilitating collaboration with centers and ecosystems in other countries.

Latvia has the potential to develop niche semiconductor expertise, such as in the field of silicon photonics, and thereby support Europe in the global semiconductor competition. The report highlights that Latvia has a well-developed scientific base in niche technologies and microelectronics, creating opportunities to develop globally competitive technologies.

The government also decided that the Investment and Development Agency of Latvia (LIAA) will be the competent authority (single point of contact) responsible for coordinating issues related to the implementation of the EU Chips Act and cross-border cooperation with other member states' competent authorities. LIAA will perform this function within the allocated state budget.

The report outlines the economic and competitiveness benefits of Latvia’s involvement in the development of the semiconductor sector, as well as the national perspective on the industry’s potential and development needs. It also provides an overview of international semiconductor development trends, the objectives of the European Chips Act, and Latvia’s available competencies that can serve as a foundation for the future development of the semiconductor sector.

Semiconductors (also known as microchips) are essential technological elements in everything from smartphones and computers to cars and medical devices. Given the rapid technological advancements and digitalization across industries, the demand for semiconductors is expected to grow. Silicon photonics, which integrates electronic and optical functions on a silicon chip, is an important future technology. It has the potential to increase data transmission speed and energy efficiency, which is crucial for sectors such as data centers, telecommunications, medical devices, and even artificial intelligence.

Most semiconductor manufacturing currently takes place in Taiwan, Japan, South Korea, and the United States, where these technologies have historically developed. The objective of the European Chips Act is to strengthen Europe’s leadership in research and technology, address semiconductor shortages within the EU, and enhance Europe’s independence in this sector. Latvia has supported the priorities and goals of the Chips Act.

Latvia’s initial opportunity lies in developing the fabless model, which means semiconductors are designed and developed but manufactured by external factories. This allows Latvia to focus on intellectual potential, research, and design, without the need for significant investment in expensive manufacturing infrastructure. Such a strategy would enable Latvia to participate in the global semiconductor market through innovation and engineering solutions, helping Europe compete on a global scale and reduce dependency on foreign manufacturing capacity.

Semiconductor technological capabilities in Latvia are being researched and developed by RTU, the University of Latvia, the Institute of Solid State Physics, and the Institute of Electronics and Computer Science. These organizations conduct high-quality research in semiconductor technologies and provide educational programs.

Several companies in Latvia are involved in the semiconductor value chain, contributing to the broader microelectronics ecosystem. Latvia is particularly active in the research of semiconductor materials, lithography, and microchip design. Estimates suggest that the market size of Latvia’s semiconductor industry exceeded €614 million in 2022, employing nearly 700 people.

Given Latvia's broad range of technological competencies and development potential, four key directions for the development of the semiconductor industry have been identified in collaboration with the sector: integrated photonic circuits, microelectronics, a polymer photonics platform, and quantum devices. These areas can be advanced by attracting EU program funding, foreign investments, and company investments, as well as utilizing funds allocated by the relevant ministries within the state budget.

It is worth noting that, based on the Chips Act guidelines, a memorandum of understanding was signed in Latvia on November 29, 2022, to develop Latvia's capabilities in the supply chain for the semiconductors needed for electronics manufacturing. The memorandum was signed by representatives from the public, private, and academic sectors. The three main action areas of the memorandum are to promote the development of the semiconductor ecosystem in Latvia, enhance education and research opportunities in the semiconductor field, and develop design and manufacturing capabilities in the semiconductor supply chain in Latvia.