Study on the changing role of intellectual property in the semiconductor industry – including non-practicing entities : executive summary.
Date: 2016-04-19
Institutions: Directorate-General for the Information Society and Media
Subjects: advanced materials, electronic component, electronics industry, industrial policy, industrial property, innovation, intellectual property, materials technology, microelectronics, patent, sample survey

Study on the changing role of 
Intellectual Property in the 
semiconductor industry – including 
non-practicing entities 

Executive Summary 

A study prepared for the European Commission 
DG Communications Networks, Content & Technology 
by: 

Digital 
Agenda 
Europe 

for 

 
 
 
 
 
 
 
 
 
 
 
 
This study was carried out for the European Commission by 

Authors: Dr Marcel de Heide, Dr Oana van der Togt, Noëlle Fischer, Jos 
Winnink 

Internal identification 

Contract number: 30-CE-0507340/00-47 

SMART number 2013/0005 

DISCLAIMER 

By the European Commission, Directorate-General of Communications Networks, Content & Technology.  

The information and views  set out in this publication are those of  the author(s) and do  not necessarily reflect 
the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in 
this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible 
for the use which may be made of the information contained therein. 

978-92-79-40389-7 

10.2759/76916

© European Union, 2014. All rights reserved. Certain parts are licensed under conditions to the EU.  

Reproduction is authorised provided the source is acknowledged. 

 
 
 
 
 
 
 
 
 
 
 
 
Executive Summary 

This  report  describes  the  results  of  a  study  on  the  changing  role  of  IP  in  the  semiconductor 
industry.  The study  addresses the following  three  specific  research questions: (1)  How  will  the 
semiconductor  industry  value  chain  evolve  in  the  next  ten  years?  Issues  to  be  addressed  are 
technology, innovation and collaboration. (2) How will IP strategies and patenting behaviour of 
the semiconductor industry develop over the coming 10 years, given the abovementioned issues 
as  well  as  the  changes  in  the  IP-regime?  (3)  What  is  the  specific  influence  of  Non  Practicing 
Entities (NPEs)?  

The corresponding analysis addressing these research questions builds on the results of a limited 
series of interviews with representatives from key-stakeholder in the semiconductor industry, and 
the response to a questionnaire distributed amongst a wider group of actors in the value chain. 
These results were subsequently corroborated by means of a literature review and patent analysis, 
and validated in  a  workshop  in  Brussels  with a subgroup of  interviewees and  respondents.   In 
practice,  the  results  in  this  report  represent  the  principal  (i.e.  commonly  shared)  view  of  the 
selected  actors  in  the  semiconductor  industry  on  the  current  and  future  practice  concerning 
innovation, collaboration and IP. 

The  interviewees  and  respondents  to  the  questionnaire  argue  that  the  actors  of  the 
semiconductor industry value chain, and especially those at the core of the chain, can be divided 
in two groups: those pursuing More Moore; and those going for More than Moore. This division also 
is 
defines 
predominantly involved in More than Moore. 

innovation  strategy,  collaboration,  and  patenting  behaviour.  Europe 

their 

The  actors  involved  in  the  analysis  argue  furthermore  that  pivotal  in  the  growth  path  of 
innovation  within 
the 
industry 
opportunities  it  will provide  (or  confinements it  will  impose). Important  developments  for  the 
next 10 years in this respect are: increased throughput; further decrease in the critical dimension 
(e.g. EUVL); and improved overlay. 

the  semiconductor 

is  manufacturing 

technology,  and 

Concerning the structure of the semiconductor industry value chain, the actors involved in the 
analysis  maintain  that  lithography  is  and  will  remain  the  most  dominant  technology  in  the 
manufacturing  process  of  chips.  The  equipment  manufacturers  currently  deploying  this 
technology  will  subsequently  also  dominate  the  market  in  the  future.  They  foresee  a  potential 
further consolidation in the equipment manufacturing market, and an increased involvement of 
IDMs with equipment manufacturers. A development that is already observed, and is foreseen to 
continue  increasing  according  to  our  analysis,  is  a  shift  in  the  supply  of  equipment  to  non-
traditional markets. That is, equipment is supplied to actors who produce for instance healthcare 
or medicine products rather than chips.  

In the market pursuing a More Moore innovation growth path, a further consolidation of existing 
actors will take place according to the interviewees and respondents. With regard to the More than 
Moore  driven  market,  there  will  be  further  fragmentation  and  specialization.  A  further  shift  of 
large  volume  production  of  standard  chips  to  emerging  low-cost  countries  is  foreseen,  with  a 
further  consolidation  amongst 
the  production  of 
the  European  actors 
semiconductors. They will further specialize in their activities, focusing on specific features (e.g. 
technologies / niches / applications), in line with the developments in the More than Moore driven 
market. 

involved 

in 

 
 
Our analysis confirms that innovation is extremely important for competitiveness of the actors in 
the  semiconductor  industry  value  chain.  Most  of  them  have  an  explicit  innovation  strategy. 
Innovation in general is research based, not so much knowledge based, and originates from ideas 
from within the organisation. EU support for research is important: the smaller actors might not 
initiate  innovation  without  the  corresponding  financial  contribution;  for  the  larger  actors  the 
contacts established within the framework of EU funded projects are a more decisive argument 
to participate. 

Collaboration (in innovation) in the value chain is vertically oriented (especially in IC design). For 
the  actors  pursuing  a  More  Moore  growth  path,  close  collaboration  with  manufacturers  is 
furthermore very important. For those involved in More than Moore, also end-users are considered. 

For  the  future,  the  stakeholders  involved  in  our  study  foresee  an  increased  collaboration  with 
actors  that  previously have not  worked  together  before. This  is  caused by  the  simple fact  that 
semiconductor technology, because of its pervasive nature, will play a prominent role in existing 
and new markets. This will go together with an increased involvement of new but large players 
such as Google that have the power to change the structure of the semiconductor industry. 

Our  analysis  also  confirms  that  IP  is  very  important  within  the  value  chain.  The  decision  on 
modality  of  IP  (i.e.  patenting,  trade  secret  etc.)  is  based  on  a  cost  benefit  analysis,  involving 
arguments  like  territorial  protection  needed,  traceability  of  IP,  and  cost  and  duration  of  the 
process  to  get  to  protection.  The  results  to  our  questionnaire  show  that  the  majority  of 
respondents are not satisfied with the current IP regime that governs the value chain, with high 
expenses, slow process, complexity, scatter, and lack of sufficient SME support being reported as 
problems of the current European system.   

Results of our patent analysis indicate that more than 60% of the applicants originate from Asian 
countries,  with  Japan  dominating  with  43%  of  the  total  share  in  patent  families  referring  to 
semiconductor  technology  (in  the  period  2005-2012).  Main  European  actors  originate  from 
Germany (6.3%), the Netherlands (2.0%), France (1.8%) and the UK (0.9%). We conclude that 
for patent applications and granted patents in 84%, respectively 76%, of the cases patent rights 
are  established  in  more  than  one  country  (i.e.  multi-national),  and  in  at  least  one  country  not 
belonging to the groups EU countries or EP countries. In case of patents, the surveyed actors 
from the semiconductor industry value chain apply at national patent offices (52%), as well as at 
the  European  Patent  Office  (EPO;  48%)  and  the  World  Intellectual  Property  Organisation 
(WIPO; 48%), depending on what the most appropriate market is to ensure adequate protection 
for this specific invention. 

A large majority of the interviewees and respondents of the questionnaire predict no change in 
IP  strategy  because  of  developments  in  market,  technology,  demand  or  EU  IP  regime.  This 
might be caused by the fact that not all details concerning the EU IP-regime are clear (notably 
the  cost  involved).  They  consider  positive  the  simplified  application  procedures  and  large 
geographical  coverage;  and  the  fact  that  a  single  procedure  will  replace  patent  litigation  in 
multiple  member  states  with  different  languages,  procedures,  and  ways  of  providing  evidence. 
Negative is considered the decentralization litigation to local courts.  

Concerning patent trolls, the interviewees and respondents to the questionnaire argue that there 
is an issue particularly in the US, and much less in Europe. This is caused in their view by the 
lower quality of patents and the high litigation costs (i.e. referring to discovery) in combination 
with  the  principle  of  “loser  does  not  necessarily  pay  the  costs”  in  the  US.  The  UPC  should 
subsequently  be  implemented  such  that  these  conditions  do  not  change  within  the  European 
context.  The  attendants  furthermore  argue  that  the  impact  of  the  UPC  on  activities  of  trolls 
depends  on  the  quality  and  awareness  of  UPC  judges  which  have  the  task  to  establish  a 

 
 
the  actual 
least  regarding 
predictable  common  practice,  no 
implementation  and  corresponding  creation  of  jurisdiction  will  further  clarify  the  potential 
impact  of  the  UPC  and  corresponding  new  patenting  system  on  the  semiconductor  industry 
value chain. 

injunctions.  In  practice, 

 
 
 
European Commission 

Study on the changing role of Intellectual Property in the 
semiconductor industry – including non-practicing entities 
Luxembourg, Publications Office of the European Union 

 2014 – 3 pages

 978-92-79-40389-7 
10.2759/76916 

 
 
  
  
 
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10.2759/76916                       978-92-79-40389-7