Reinhard Ploss, CEO of Infineon Technologies AG, used the opportunity of his company's annual general meeting on Wednesday Feb. 13, to call for policy makers to favor Germany and Europe as industrial centers.
Ploss said that European companies – and politicians – need to revisit to the days when they not only served markets but also defined them as it did with the creation of GSM mobile telephony standards in the 1980s. "If global industrial standards are to continue to come from Europe, we need to think on a larger scale and cooperate on a European level. It is only then that we can achieve the critical mass," Ploss said.
Infineon's CEO said that ECSEL, a European initiative with a budget of about €4.185 billion (about $6.6 billion) was the right way to address the challenge coming from Asia. But it should be used to support large companies as well as small- and medium-sized enterprises.
The call for cooperation comes even as the publishing of report is awaited on how to reverse the decline of electronics and semiconductor manufacturing in Europe. Ploss is one of the European CEOs that form the Electronics Leaders Group that has been charged with coming up with a strategy to implement what European Commission vice president Neelie Kroes calls: "the Airbus of Chips."
While the European Commission wants to see local manufacturing moving up the agenda its "go-to" companies Infineon, NXP and STMicroelectronics have mainly been trying to reduce capital expenditures and move to fab-lite strategies.
Ploss said that Infineon plans to invest €650 million (about $900 million) during the course of the current fiscal year, a sum that represents 15 percent of the expected revenue. He added that the majority of these investments will be in Germany, owing to the favorable investment environment there. “However, we should not be too complacent. Our country needs to do more if we wish to continue to be successful and maintain our leading position," Ploss added.
Besides a coordinated pan-European industrial policy Ploss suggested that technology-based companies should pay reduced energy bills. High-tech companies form the backbone of a sustainable, future-oriented economy and should be encouraged, he said. Ploss said he welcomed the European Commission's initiative to re-industrialize Europe.
Infineon made a profit of €377 million (about $515 million) on revenue of €3.84 billion (about $5.25 billion) in its 2013 financial year, which end on Sept. 30, 2013.
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