The Electronica CEO Round Table took place this morning with, traditionally, the CEOs of Europe’s Big Three chip companies – Infineon, ST and NXP. Making up a four was Gunther Kegel, CEO of Pepperl and Fuchs.

It soon became clear that the CEOs picked up on the infection early on from their Chinese operations and acted quickly to put in defences.
Jean-Marc Chery, COOJean-Marc Chery of ST heard about it from an ST Shenzhen facility while at a financial road show in London. 
Gunther Kegel heard about it from his company’s Shanghai facility and said: “It took a handful of days to realise this was becoming a pandemic.”

Reinhard Ploss of Infineon said: “The situation quickly became clear from various sites and in a short time employees were switched from offices to homes.”
Kurt Seivers of NXP said: “It was good that it came in stages starting in China and we could get ready before it hit the rest of the world.”
“There were some weeks of government-ordered reductions of employees in Asia-Pac factories,” said Seivers, “our biggest challenges have been to keep up the engagements between our people – it’s important for creativity and innovation to have those interconnections.” 
Seivers sees “a V-shaped recovery which is faster and better than anticipated”  driven by three things:
“Everything that supports laptops and working from home has been booming this year,” said Seivers, secondly: “Contactless technology – people want contactless payments” and thirdly “the car industry in China is recovering fast because people are avoiding public transport.” 
Chery sees good market signs in the US and Europe and is projecting growth in Europe and the US. Driving the growth are three megatrends, said Chery, electrification of cars, digitalisation and ADAS.
Asked about the disruptive effect of US-China trade tensions,  Ploss stated: Some of the value chain is moving around. You need to avoid being dependent on a sole supplier.” He added: “The tech war is on – we in Europe have to get our act together.”
Seivers agreed with Ploss. “Europe needs to get on its feet and start working as a joint union,” said Seivers, “the fight between the US and China opens up an opportunity for Europe – but only if Europe acts as one bloc. Europe has a massive value chain – it all has to be done jointly.”
“The trade dispute reverses  globalisation,” added Seivers, “which is a negative, because technology does a lot of good in areas like climate change and road traffic accidents. The trade dispute slows down innovation because we’re not globally collaborating. That’s a pity.”
“We have to be very thoughtful about the supply chains – particularly of IP which is the core value of products,” added Seivers, “in general I believe that after the  US election things will become more diplomatic again.”
Seivers said NXP’s Q4 sales to Huawei would be zero unless NXP got licences for them, which it has applied for but, he added, that a large part of Huawei is its mobile phone business and that increased orders from Huawei’s competitors may make up the deficit in Huawei sales. 
If world trade decouples, then companies must adapt, said Chery. “Today the world archetype is global –  if we’re moving to a world which is partially or fully decoupled then you need to produce locally.”
Ploss argued: “What we see is uneven competition – there’s no level playing field. China’s industry is supported with grants. Europe can do more than just R&D programmes. We continue to grow in the China market and we are growing in Japan in automotive and in the US and in Korea, We can’t depend on the growth of China long-term.“
Asked about the China-Taiwan tensions, Seivers said: “We always monitor the risks across our supply chain. Even if there were new tensions then there will be ways to deal with it, for instance the expanding global footprint of TSMC. We have to constantly adjust to take account of changes – there’s always something coming up to which we have to adjust.“
Asked about the significance of the recent M&A mega deals in the industry, Chery said: “Behind megadeals there is always a strategy. For Nvidia it’s AI and the enabler is the processor.”
Asked about market opportunities, Ploss said that the biggest opportunity was in automotive and that EV will be Infineon’s biggest growth driver in 2021.
For Seivers the market driver is edge processing: “ I really believe the next 10 years are all about secure edge processing,” said Seiver, “we see the opportunity to build on secure edge processing – it’s a great opportunity for European companies and particularly for NXP.”
“The world will be different after corona, “ said Kegel, “for instance international travel which was
cross-subsidised by business travel and business  travel can’t grow back to the same amount because people are accepting other ways to do business.”
For all the participants there was a feeling that we are not going back to the pre-Corona world.
“I am personally convinced that things will not go 100% back to where they were, even when vaccines are in place and there are no more travel restrictions , because we have found more efficient ways to achieve results,” said  Seivers, “it’s  just another transition and we’ve got to learn from it.”
Chery agreed that life after corona would be different: “We have adapted to the outbreak,” said Chery, “we will find a way – we always find a way.”