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Global potential in chip design for Estonian companies

The demand for semiconductor chips is skyrocketing, driven by the global green and digital transition. As technology becomes increasingly embedded in various aspects of our lives, from security to healthcare, the need for chips continues to grow exponentially. A recent report published by the Foresight Center sheds light on the immense potential for Estonian businesses in the chip design, verification, and security testing domains. According to experts, Estonia could tap into this booming market and leverage its strengths to make significant strides in the chip industry.

The report, titled “Embedded systems and chip technologies: The state of play and prospects,” highlights the tremendous growth expected in the global chip and embedded systems market. Currently estimated at around €550 billion, the sector is projected to reach a staggering €1 trillion by 2030. This presents a compelling opportunity for Estonian businesses to participate in this dynamic market.

While it may not be feasible for Estonia to establish large chip manufacturing plants due to the substantial investment requirements and associated risks, the country can focus on small and serial chip production as well as special solutions. One potential area of growth is in freeware chips, which offer an avenue for small companies to produce innovative chip solutions.

The Foresight Center’s report also identifies the possibility of Estonia fulfilling certain stages in the production of novel high-temperature semiconductor devices, such as base crystals. As chip technologies become simpler, there is an opportunity for Estonia to offer special solutions and small series, which are not typically produced by large international chip plants.

Estonia’s existing tech companies operating in the chip industry can serve as a strong foundation for further growth. These include businesses specializing in medical chip labs, microcircuit development, 3D camera technology, semiconductor device software testing, particle sensor technology, and sensor devices. With the right strategic approach and innovation, these companies can play a vital role in driving the chip industry’s development within the country.

The focus in chip technology development has historically been on producing smaller, cheaper, faster, and more energy-efficient chips. Experts anticipate a continuation of this incremental development rather than a revolutionary breakthrough. Nevertheless, the pace of innovation and demand for chips is not slowing down anytime soon.

As chips become more complex, the development process becomes increasingly labor-intensive. Consequently, a greater share of value creation has shifted from semiconductor production companies to chip development companies. This opens up opportunities for businesses specializing in chip design, verification, and security testing.

While the report points out that the production of embedded system components may not be economically viable in Estonia due to high investment needs and production risks, there are still significant avenues for growth and contribution to the chip industry’s value chain.

The Foresight Center’s research emphasizes the importance of seizing opportunities in the chip industry as part of the green transition scenarios in Estonia. The country’s think tank is dedicated to analyzing long-term developments in society and the economy, and its insights offer valuable guidance for businesses and policymakers alike.

The rapid expansion of the global chip and embedded systems market presents a promising landscape for Estonian businesses to make their mark. While large-scale chip manufacturing may not be on the horizon, the country’s potential lies in niche areas such as small and serial chip production, freeware chips, and special solutions. Estonian companies can carve out a significant role in the ever-evolving chip industry by focusing on chip design, verification and security testing. With strategic investments in research and development, collaboration with academia, and fostering a supportive ecosystem, Estonia can harness the potential of this burgeoning market and become a key player in the chip industry of the future.

Report (in Estonian)

Estonian-Chinese Chamber of Commerce

The Estonian-Chinese Chamber of Commerce (EECN) is a non-profit organization dedicated to fostering and enhancing economic, commercial, and cultural ties between Estonia and China.View Author posts

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