Opportunities for Croatian Companies in Chip Production

Lauren Simmonds

croatian companies

February the 5th, 2024 – Opportunities lie in the world of chip production for Croatian companies such as Končar and Rimac.

As Poslovni Dnevnik/Josipa Rimac writes, without semiconductors, or chips as we more informally refer to them as nowadays, there can be no digital society. This electronic component is a necessary part of absolutely all electronic devices (from computers and cars down to electric toothbrushes), so it isn’t remotely surprising that here in Europe, there’s currently a real fight going on to attract investors willing to pour their cash into the high-tech industry of the future.

The Republic of Croatia, on the other hand, is catching up. Academic institutions, led by FER, are leading Croatia on this journey of catching the “chip train” before it leaves the station. An important step in this regard was the recent signing of the Memorandum of Cooperation between the Zagreb Faculty of Electrical Engineering and Computing and imec, one of the largest European institutes for research, development and innovation in nano-electronics and digital technologies, headquartered in Belgium.

Vedran Bilas, the Dean of FER, explained, “There has been cooperating with imec for a decade now, and with this signing, they’re going one step further – they’re ensuring cooperation in the Centre of Competence for Semiconductors, which is yet to be established”.

According to Bilas, this future centre will unite academic and industrial knowledge with the aim of developing a chip industry right here in Croatia. It will consist of a consortium of six academic partners, led by FER and two industrial partners (negotiations are currently underway with two large Croatian companies – Končar and Rimac). The formal establishment, on the other hand, should take place after the Ministry of Economy and Sustainable Development announces a public call for the financing of its functioning. The amount isn’t yet known, but it is expected to be worth several million euros, and it should be announced in the second quarter of 2024.

The European Act on Chips, which entered into force back in September 2023 and is the basis for the development of the semiconductor industry here in Europe, predicts that total investments (both private and public) in the EU by 2030 in the sector will amount to as much as 43 billion euros. “The EU itself will support it with 3.3 billion euros,” revealed Karlo Ressler, HDZ’s MEP.

This industry is important to the European Union as it will work to rid the bloc of its dependence on production in the Far East (the largest chip manufacturer is currently the Taiwanese TSMC and Korea’s gigantic Samsung). We witnessed the consequences of this dependence through the global coronavirus pandemic and interruptions in the supply chain, when European factories couldn’t easily access chips, meaning that production was stopped for many cars and other vehicles. The EU participates in the world’s chip production with a mere 10% stake, and its goal is to reach 20% by 2030. Germany and France, countries that understand that without the development of high-tech industries their residents cannot be rich, typically attract investors with ease.

In Germany, the construction of two semiconductor factories is currently underway. Those facilities are being constructed in Dresden by the Taiwanese TSMS and ita partners (the value of the project stands at about 11 billion) and by Intel in Magdeburg, which is investing about 30 billion euros. Both investments, as well as the one in the French town of Crolles, are being very generously supported by the state. The German Federal Government allocated around 15 billion euros in state aid for the two factories, and the French investment of the American GlobalFoundries and the Swiss STMicroelectronics was supported with a massive three billion.

How does the situation look for Croatia?

Unlike the likes of France and Germany, Croatia can’t realistically count on such large investments in the start of its chip production. “We simply don’t have the capacity for that – neither material nor human. However, Croatia can and must be included in the EU’s value chains of an industry that is a “priority for the progress of the bloc”, explained the Dean of FER.

“Croatia has no choice. In order to be better off, as well as be more secure and richer, it must introduce intensive technologies. Chips are one of those technologies that we need and that is already here now. It’s a train we can definitely jump on before it’s too late,” Bilas pointed out. It is also important in order to retain the engineers Croatia trains in the field of semiconductors. Bilas noted that 20 to 30 specialists who are qualified in the design, manufacture and testing of chips come out of their faculty every single year.

Although it seems small, Bilas pointed out that this is actually enough for domestic needs. The most significant support for the development of the Croatian industry in this area will be the future Competence Centre.

“We might imagine it as a service centre behind which there are academic institutions and companies that possess knowledge and technologies and can design chips, test them, and create new applications for chip. There will also be end users, and that’s everyone those who would like to learn how to design a chip.

These chips are designed with very expensive and complex tools that require licenses, which will be provided by the Competence Centre”, explained Bilas, noting that through the Centre, users will also have access to production lines in the Belgian imec, and they will be educated about sources of financing. Only imec, an institute with which FER has a very good cooperation, according to Bilas, has a fund of 250 million US dollars, which is intended for startup companies that develop technologies related to chips.

The establishment of the Competence Centre and cooperation with imec, an institute that employs 6,000 people, is also welcomed by the industry. Srđan Kovačević, the co-founder and director of Orqa, who is also president of the Microelectronics and Semiconductors Association at the Croatian Chamber of Commerce (HGK), stated that this is a big step for Croatia’s ecosystem.

“Technologically speaking, this is a very, very demanding domain, and without the cooperation of the public and private sectors, Croatia simply won’t be able to catch up with the rest of the world,” Kovačević stated.

There are currently only a few Croatian companies operating in this niche at the moment. The most famous of all is Applied Ceramics from Sisak, which was started by American returnee Matt Darko Sertić, and which deals with the production of ceramic components used in machines for making microchips. There is also Eridan, which operates in the field of chip design. On top of that, there’s a relatively new initiative pushing the production of a new Croatian chip, backed by Orqa, but as Kovačević explained, the barriers to entry into the industry, in terms of knowledge, tools and capital, are enormous. The Competence Centre should work to remove these barriers because companies will be given access to both knowledge and tools.


Subscribe to our newsletter

the fields marked with * are required
Email: *
First name:
Last name:
Gender: Male Female
Please don't insert text in the box below!

Leave a Comment