Chips from the North: Brighter days are coming!  

The Semiconductor Strategy for Finland is now released.

The global semiconductor market is arguably one of the fastest-growing industries in this rapidly moving world. The prediction is that the semiconductor market will grow from €570B to at least €1T by 2030. This unveils opportunities for many countries to boost their economy and Finland is already working on seizing this opportunity to grow as a country in the upcoming years.  

On the 26^th of April 2024, Technology Industries of Finland (TIF) released the report on the national semiconductor strategy: “Chips from the North – Semiconductor Strategy for Finland” in collaboration with Boston Consulting Group (BCG) and enabled by support from TT-säätiö. This report identifies six must-win opportunities for the Finnish semiconductor market to become a giant in the global semiconductor industry in just over 10 years.  

“The semiconductor sector presents a substantial opportunity for Finland to accelerate export growth and create high-value jobs. Concurrently, we aim to bolster Europe’s technological prowess and supply chain resilience amid global uncertainties” 

-Tommy Runne-

So far, Finland has been recognized as a middle player in the global semiconductor industry. The tangible outcomes of the local market have been satisfactory. Finland’s own export-heavy semiconductor industry has reached an estimated €1,6B annual revenue in 2022 and employed around 7000 people. It is high time that Finland unleashes its full potential and becomes a significant influencer of the industry given its infrastructure facilities and technological progress. And that is exactly what Finland is planning to do over the next ten years! 

In the new strategy, the vision is to triple the revenues to €5-6B, have a direct employee base of around 20000 people and generate 15000 or more ancillary jobs that have the potential to bring an indirect value of approximately €180B by 2035. The strategy has been developed using an independent, fact-based analysis. To achieve this long-term goal three guiding principles were first developed to identify growth opportunities in Finland. 

The three guiding principles are as follows: 

1. An opportunity should build on Finland’s current strengths and advantages.
2. An opportunity should be supported by existing research and education. 
3. An opportunity should be backed up by high-demand growth. 

Based on these three principles, the six main opportunities for Finland to capitalize on market growth were designed as the essence of the Semiconductor Strategy for Finland.

1. Chip design: Specialized mobile network, edge AI, and ultra-low power system-on-chips
2. MEMS and sensor innovation: Next-generation MEMS and sensor technologies for communications, healthcare, and automotive sectors
3. Photonics: Enhanced photonics value chain and system-in-package design leadership
4. Quantum technologies: Research, design, fabrication, and integration of quantum technologies
5. Advanced materials: Research, development, and manufacturing of advanced materials
6. Process technologies: Sustainable thin-film deposition and flexible microelectronics technologies.

The ultimate visionary perspective of these identified opportunities is to strengthen the Finnish Semiconductor market, broaden its visibility across the global industry and make a significant impact on the EU’s strategic objectives for technological autonomy and competitiveness as well as to boost the country’s economy exponentially in the following years.

While the 6 growth opportunities are created based on three logical principles, it is also important to have realistic and measurable targets to observe the realization of each opportunity. In order to do so, the report indicates 5 core outcomes for each opportunity:

1. Competitive R&D ecosystem
2. Workforce growth
3. R&D and design site investments
4. Manufacturing site investments
5. Collaborative ecosystem

“Achieving the outcomes places Finland at the forefront of semiconductor innovation, meets workforce demands, and establishes Finland as a preferred location for specialized research and manufacturing in Europe and globally.”

-Semiconductor Strategy for Finland-

The Finnish semiconductor industry is currently contributing 0.5% to Finland’s annual GDP. Finnish semiconductor companies hold a significant market share in specialized areas. Even foreign companies show interest in establishing their presence in Finland through opening offices in Finland or through acquisitions. The reason why Finland has become so attractive to the semiconductor industry is its already prevailing competitive advantages compared to other countries. In this report, they mention 10 main areas where Finland shines in supporting R&D in the semiconductor industry.

Yet, Finland has its limitations that hinder its growth which need to be addressed assertively in the journey of achieving the Finnish semiconductor vision. Supply of talent, attraction of international workforce, lack of large domestic end-use markets, lack of large semiconductor manufacturing facilities, and raising later-stage larger growth funding are the top five challenges Finland is currently facing in the semiconductor industry.

Finland is hustling to eradicate these limitations and to empower the semiconductor industry at full speed. The government and the industry are ready to join hand in hand more than ever to collaborate on harnessing the opportunities in the next 10 years.

“We appreciate the Finnish government’s pledge to ensure vital funding for collaborative projects under the EU’s Chips Act such as shared pilot infrastructure. Our strategy sets the direction for more effective partnerships between the industry and stakeholders. The decisions we make today will define Finland’s future success”

-Tommy Runne-

On a final note, let’s discuss the role of the Oulu region in the Finnish semiconductor industry. While the industry is spread over a few regions across Finland, the Oulu region is mainly responsible for the Wireless and sensor cluster. Its expertise is focused on communications technologies. The contribution is accumulated up to €260M by 14 companies and over 1400 employees. It will undoubtedly increase in future holding a pivotal role in the realization of the national semiconductor strategy by 2035 and we as the ICTOulu team will always support and encourage the semiconductor industry in Oulu to grow and expand its horizons!

To read more about the strategy please refer to the original article: Chips from the North Semiconductor Strategy for Finland