Three Questions to Carlo Reita: Semiconductor Policy, the Italian Way

What are your observations and overall assessment of Italy’s semiconductor policies in a tense geopolitical context? 

Italy's semiconductor policies initiated a major review during the 2020-2023 chips crisis, when the sector's profound impact on the rest of the economy was finally understood and acknowledged. This moment underscored the necessity of viewing semiconductors not as a mere commodity, but as strategic goods prone to access challenges.

An in-depth analysis of the situation was initiated under the Draghi government, beginning with a real deep dive into Italy's electronics supply chain. À critical realization at the time was that Italy was actually more deeply involved in the global supply chain than most people thought, due to both Italian companies and European and extra-European companies present in the country. The Italian microelectronics picture was also recognized as more complex than anticipated: it became clear that the Italian semiconductor ecosystem was much broader than assumed, involving many companies besides STMicroelectronics. 

This turning point led to the choice of investing in very specific sectors. Part of the strategy was to bolster the production ecosystem through factory investment, resulting in the major power electronics projects in Catania and in Agrate. Crucially, to capitalize on the simultaneous push for diversification (at that time, Intel was looking to set up in Europe), Italy extended some aspects of its emergency legislation, originally enacted after the Genova bridge collapse, to cover highly strategic projects such as semiconductors. This legal decision created a framework to accelerate the approval process for new infrastructure. This fast-track framework quickly benefited AIXTRON, which established a fabrication plant in Piedmont. It is also the basis for the announced investment by the Singaporean component packaging company Silicon Box in Novara, an investment that has received DG COMP clearance and is currently in the final stages of discussion for public support.

How does Italy assess supply chain vulnerabilities in the semiconductor sector, and what measures are being put in place to enhance resilience?

Supply chain vulnerabilities have now been clearly acknowledged in Italy, particularly across the country’s key industrial sectors: automotive, aerospace, industrial equipment, and automation. The heavy reliance of these sectors on a steady chip supply has become a central concern, prompting support initiatives, including alignment with European efforts and a focus on projects in Agrate and Catania, especially for chips linked to the automotive sector.

Some of Italy’s system companies, which are mostly chip users, have started reassessing their supply chains. For instance, large players like Leonardo are actively exploring the reactivation of internal capabilities to produce specialty chips, including compound semiconductors. Overall, there is growing awareness in the industry that the landscape has changed. However, realization does not fully translate into action and progress remains quite slow. The major gap I see is a continued reluctance to take risks, which in turn delays decisions. That said, momentum is building. Italy has certain unique strengths, particularly in its dynamic, export-oriented "big-medium" enterprises and family-owned businesses operating globally.

Besides domestic solutions, there is clearly a renewed interest in securing access to foundries and advanced technologies from abroad. À lot of attention is currently being directed in Italy toward the initiative involving GlobalFoundries in Dresden, Germany. These efforts are seen as part of a broader response to recent supply instabilities: not aiming for full domestic autonomy, but rather for a stronger European position in foundry capacities. Industry concerns revolve around ensuring reliable access to specialty technologies and both advanced and mature nodes, though not necessarily leading-edge ones. In this regard, joint ventures with ESMC and GlobalFoundries are seen as critical components of the broader solution.

More generally, there is a broad recognition that the country cannot do everything on its own, but that it can and should play a strong role in selected segments of the supply chain.

What initiatives are underway to strengthen the competitiveness of Italy’s semiconductor ecosystem, both in terms of industrial capacity and innovation?

Let me first insist on one often overestimated aspect: the time required in Europe to complete administrative processes and comply with all the different rules is long across the board. This is not just about finance and innovation: the time component matters and lengthy processes are truly counterproductive for competitiveness. Getting there late, even when there is demand, can mean failure. Speed would need to be on a completely different scale.

But let’s close that parenthesis. On the innovation side, the EU’s pilot line on wide bandgap (WBG) materials, which will be set up in Catania, is a much welcome initiative. It aims at developing power device materials for automotive and industrial applications, and is a major project for Italy. 

Finally, innovation issues in Italy are also addressed through Fondazione Chips-IT. The creation of this foundation, launched in January 2024, has marked a turning point and a recognition that existing actors like universities or fundamental research institutions were not fully suited to drive microelectronics innovation. Chips-IT is Italy’s dedicated RTO for microelectronics. It intentionally avoids duplicating existing players like CEA-Leti or Fraunhofer (setting up a similar institute in Italy has been considered too capital-intensive, and too late in any case). Instead, Chips-IT focuses investments on high-value parts of the supply chain, particularly design.

The goal is to develop new research in architecture, new design for computation, AI acceleration, and general-purpose electronics, especially analog components for interfacing with the physical world. À strong link is being developed with robotics research at IIT (Italian Institute of Technology), reflecting Italy’s industrial strengths. The idea is to look at where the added value could be for the Italian ecosystem: in AI, edge computing, energy efficiency and integration-not to replicate Nvidia or Intel, but to innovate for the industries that matter most to the country. Chips-IT has hired engineers and scientists that are already working on programs, with plans to expand. We are looking into investing in a computer testing infrastructure that could be at the forefront of research in Europe. Chips-IT currently receives€25 million annually from the Italian Ministry of Industry and also generates revenues from European and national projects.

Copyright Giuseppe CACACE / AFP
An Italian Leonardo (formerly AgustaWestland) AW609 on the tarmac at the 2021 Dubai Airshow.