<div id="readability-page-1"><div>//php echo do_shortcode('[responsivevoice_button voice=&#34;US English Male&#34; buttontext=&#34;Listen to Post&#34;]') ?&gt; Italy is rarely mentioned in Europe’s semiconductor sovereignty debate. When policymakers talk about strategic autonomy, they point to flagship fabs in France, Germany, or the Netherlands, or to headline investments backed by the EU Chips Act. Yet Italy sits at the center of several of Europe’s most exposed automotive and power electronics supply chains—often without a clear picture of where its dependencies really lie.That opacity matters. As export controls tighten, Chinese technology advances rapidly in electric vehicles (EVs) and power electronics, and geopolitical risk becomes harder to ignore, Italy’s strengths—and vulnerabilities—offer a revealing case study of how Europe may still be blind to its real exposure.Recent moves, such as the European Investment Bank’s €1 billion financing facility for STMicroelectronics, are intended to strengthen Europe’s semiconductor backbone. But exclusive interviews with EIB officials and an Italian academic expert suggest that while such investments address key structural weaknesses, they also leave critical blind spots untouched—particularly deeper in the supply chain. <h3>A fragmented but globally embedded ecosystem</h3>Compared with Germany or France, Italy’s automotive and electronics ecosystem is unusually fragmented. It combines a handful of large industrial players with a dense network of small and mid-sized firms that are highly specialized and deeply embedded in global markets. “Despite their size, these companies excel worldwide thanks to their flexibility and high level of specialization,” Matteo Sonza Reorda, full professor at Politecnico di Torino, told EE Times. That structure has long been a competitive advantage, but it also makes exposure harder to see. Italian OEMs themselves are no longer purely Italian. Fiat is part of Stellantis. Iveco is partly owned by Tata and Leonardo. Supply chains that appear European on paper often conceal non-European dependencies further upstream. In power electronics, packaging, substrates, specialty chemicals, and testing equipment, Chinese suppliers increasingly play a role—sometimes without Italian companies being fully aware of it.“The whole automotive business is very interconnected and very complex,” Sonza Reorda said. “Tracing back the real origin of a given component may be challenging, even for the companies themselves.” Public debate often focuses on chips “designed in China” versus those designed in Europe or the U.S. But according to Sonza Reorda, that framing misses where much of the real risk lies.“The risk is often less about chip design and more about manufacturing, equipment, and materials,” he said. These are often areas where Chinese suppliers have built dominant positions—and where visibility rapidly drops beyond Tier-1 suppliers.Many Italian automotive suppliers rely on global distributors or Tier-1 integrators, making it difficult—and sometimes commercially sensitive—to map dependencies further upstream. As a result, Europe may appear diversified on paper while remaining exposed to single points of failure in practice.This pattern echoes concerns raised elsewhere in Europe, including in the Netherlands’ Nexperia case, where Chinese ownership of a seemingly peripheral semiconductor asset triggered national-security intervention. Sonza Reorda believes similar risks could exist in Italy, particularly among mid-sized companies that lack the resources to actively de-risk.“De-risking has a price,” Sonza Reorda said. “Companies should be in the position of being able to afford this extra cost. This is more acceptable for strong, long-term planning companies.”For many Italian SMEs, dependence on Chinese components is not ideological but economic. Chinese suppliers are often faster, cheaper, and more vertically integrated—especially in EV-related power electronics. Breaking that dependence without public support risks eroding competitiveness.This creates a structural asymmetry. The companies most exposed to geopolitical shocks are often the least able to mitigate them. Ironically, some of Italy’s most globally important semiconductor players are neither fabs nor chip designers—and are therefore easy to overlook.Sonza Reorda pointed to Spea and Technoprobe as emblematic examples. Both are world leaders in semiconductor testing and probing technologies, exporting extensively to Asia, including China and South Korea. “These companies are crucial,” he said. “When you produce any device, you need to test it.”Spea provides MEMS and power electronics testing systems, while Technoprobe specializes in probe cards that physically connect test equipment to chips during validation. Despite their strategic importance, such firms rarely feature in European sovereignty debates, which tend to focus on wafer fabs and headline capital-expenditure announcements. Yet disruptions affecting these “hidden” players would ripple across the entire value chain.<h3>EIB–ST: strengthening the core of Europe’s chip base</h3>Against this backdrop, the EIB’s €1 billion financing package for STMicroelectronics is designed to shore up Europe’s semiconductor core, particularly in power electronics and automotive applications.According to Romolo Isaia, head of division at the EIB responsible for corporate operations in Italy and Malta, the rationale rests on three pillars: the strategic importance of semiconductors for Europe’s economy, alignment with EU policy objectives such as the Chips Act, and what he describes as a “systemic approach” to investment—supporting innovation, production, and downstream applications together, as opposed to isolated investments.Unlike commercial lending, EIB financing is tied to clearly defined investment projects, not working capital. Saverio Rossetti, a senior loan officer involved in structuring the ST operation, said the bank finances only specific R&amp;D and capital-expenditure programs and typically covers no more than 50% of total project costs to avoid crowding out private investment.The ST facility supports investments in Italy and France, including sites in Catania, Agrate, and Crolles. Of particular significance is Catania, where ST is building a fully integrated silicon-carbide manufacturing line, covering the entire process from raw silicon powder through front-end and back-end production.“This grants a complete independence of STMicroelectronics in producing its components,” Sonza Reorda said, describing the vertical integration as “very attractive from the point of view of European sovereignty.”From the EIB’s perspective, the project addresses Europe’s historic imbalance between design and manufacturing. Past semiconductor shortages highlighted how dependent Europe remains on production concentrated in Asia.“Europe is strong in research and design, but production remains concentrated elsewhere, especially in Asia,” Isaia said. Expanding manufacturing capacity inside Europe is therefore seen as a way to reduce vulnerability to geopolitical shocks, not as an attempt to disengage from global trade.The ST investment clearly strengthens Europe’s position in power electronics, particularly for EVs. It supports skilled employment, R&amp;D, and manufacturing capacity, with progress monitored through project-specific KPIs covering employment, innovation, and production output. Rossetti said such KPIs are built into EIB loan agreements and tracked over time.But both the EIB officials and Sonza Reorda are careful not to oversell the deal’s impact on Europe’s broader China exposure. The investment reduces risk for one major player, not for the entire ecosystem.“The real impact on reducing dependence from Chinese providers will strongly depend on how much the objective of improving European technological sovereignty is actually pursued,” Sonza Reorda said. Materials, specialty chemicals, equipment, and downstream packaging often remain outside the scope of flagship fab investments.Italy’s case highlights a broader European challenge. Sovereignty is not just about fabs and headline investments. It’s about understanding—and supporting—the dense web of suppliers, tools, materials, and niche specialists that make modern electronics possible.Large investments like the EIB–ST facility are necessary and strategically sound. But without complementary measures aimed at SMEs, testing specialists, materials suppliers, and Tier-2 and Tier-3 players, Europe risks building a fortress with hidden weak points. “We’re going in the right direction,” Sonza Reorda said. “But there is still quite a lot of room for improvement.”For Europe—and for Italy in particular—the real test of de-risking may not be how many fabs are built, but whether policymakers can see, and act on, the dependencies that remain invisible today.<hr/>Read also:<hr/> </div></div>

STMEF

Italy's role in Europe's semiconductor landscape is often overlooked, despite its significant exposure in automotive and power electronics supply chains. As export controls tighten and Chinese technology advances, Italy's vulnerabilities become apparent. The European Investment Bank's €1 billion financing for STMicroelectronics aims to strengthen Europe's semiconductor backbone, but critical blind spots remain in the supply chain. Italian automotive suppliers face challenges in mapping dependencies, often relying on global distributors. This structural asymmetry leaves smaller firms particularly exposed to geopolitical risks, highlighting the need for public support to maintain competitiveness.

Italy’s Quiet Exposure to China in Automotive and Power Chips