John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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169. To ask the Minister for Enterprise, Trade and Employment his plans to expand the semiconductor and microelectronics sector in Ireland; and if he will make a statement on the matter. [4541/23]

Simon Coveney (Cork South Central, Fine Gael)
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The microelectronics industry is of great importance to Ireland. We have a significant semiconductor design and fabrication history and we have developed a strong domestic and international semiconductor industry and research and development ecosystem, with over 130 indigenous and foreign subsidiary companies across the microelectronics value chain. There are over 20,000 people currently employed in Ireland’s semiconductor industry and we export €13.5bn worth of products annually.

Semiconductor chips are central to the digital economy and are used in numerous everyday products including smartphones and cars in addition to critical applications and infrastructure in health, energy, communications and automation. However, recent supply chain challenges have revealed structural vulnerabilities in the European value chain, exposing Europe’s dependency for supply on a limited number of companies, many of which are located outside of the EU.

In February 2022, the European Commission announced a proposal for a European Chips Act, which aims to strengthen the European semiconductor ecosystem, to increase the EU’s security of supply of semiconductors and to develop new markets for cutting-edge European technologies. Since that date, officials from my Department have been engaged in negotiations on the proposal. My Department has also conducted a public consultation to consider views from Irish stakeholders, the results of which can be found on the Departmental website.

Ireland supported the adoption of the European Council’s position (general approach) on the Chips Act during the Competitiveness Council on the 1st of December 2022, and we look forward to continued constructive engagement with the Commission, the Presidency and Member States as the file progresses.

The semiconductor sector is recognised as cyclical due to the shifts in consumer demand and the huge cost of capital investment required to build new capacity.  Despite its cyclicality, it is a long-term growth sector. Companies will continue to deploy capital to meet the needs of increased long-term demand for chips in a range of consumer and enterprise devices and equipment applications. 

Ireland is ready and able to support the objectives of the Chips Act, which will enable us to further develop our research, development and innovation landscape and increase our capacity to produce semiconductor chips.