According to the Investment Profile on Portugal published in the May issue of Site Selection Magazine, Portugal’s innovation mindset cultivates a growing sweet spot for the global semiconductor industry.
It’s no coincidence that the global ecosystem of the $520 billion semiconductor industry needs to be as finely tuned as the pathways etched on a microchip.
Accordingly, as the industry is projected to grow by more than 13% in 2024, there are many valuable roles to play and many pathways toward success. In a European marketplace surging on the power of the EU Chips Act and a wave of new corporate investment, Portugal’s performance is receiving rave reviews thus far.
Micro- and nano-electronics enable the generation of at least 10% of European and global GDP, according to the European Semiconductor Industry Association, which confirms that the R&D-intensive European semiconductor ecosystem supports approximately 200,000 jobs directly and up to 1 million induced jobs in systems, applications and services in Europe.
That ecosystem also welcomes talent from elsewhere to help fill occupational gaps in an industry that requires up to 15,000 new skilled workers in the next few years in response to corporate investments in the EU and the EU Chips Act’s target of doubling the EU’s share of the global market to 20% by 2030. In November 2023, the EU Commission proposed the EU Talent Pool to support the recruitment of job seekers from third countries in EU-wide shortage occupations.
Is Portugal’s relative openness to international talent immigration a positive aspect of maintaining and growing semiconductor operations there? Celio Albuquerque certainly thinks so.
“Yes, it is certainly a positive aspect for maintaining and growing operations there,” says Albuquerque, vice president of R&D Engineering for the Solutions Group at California-based Synopsys, a silicon-to-systems design firm with operations in Porto and Lisbon.
“This policy allows companies to attract and retain top talent from around the world, fostering a diverse and inclusive workforce that can drive innovation. It also helps to fill any skills gaps in the local workforce, ensuring that companies have the necessary expertise to grow and succeed. This is especially beneficial for tech companies like Synopsys, which rely on highly skilled employees.”
In business for more than 35 years and based in the Silicon Valley community of Sunnyvale, Synopsys employs more than 20,000 people worldwide and reports annual revenues topping $5.5 billion. The company is celebrating 15 years in Portugal this year.
“We established locations in Lisbon and Porto as part of our global expansion strategy to tap into Portugal’s growing technology sector,” Albuquerque says. “Our Portugal team includes members of our Design IP business, which is a growing segment of our business, providing pre-designed components that our semiconductor customers can incorporate into their products rather than designing those circuits themselves.
What has kept the company in those locations over those 15 years? Albuquerque says these factors distinguish the company’s Portugal operations from its other global sites, while also adding value to overall operations:
Talent Pool: “Portugal has a high number of well-educated, skilled, and multilingual professionals, especially in the fields of engineering and technology. This provides Synopsys with a rich and diverse talent pool to recruit from.”
Strategic Location: “Portugal’s strategic location at the crossroads of Europe, Africa, Asia and the Americas allows Synopsys to easily serve clients across these continents. Its position in the same time zone as the UK and Ireland also facilitates synchronous communication with European clients.”
Innovation Hub: “Portugal is becoming an increasingly important hub for technology and innovation, with an evolving startup ecosystem and a growing number of tech events and conferences. This vibrant tech scene fosters creativity and collaboration, which can benefit Synopsys’ operations.”
Cost Efficiency: “Operating costs in Portugal are generally lower than in many other European countries.”
Government Support: “The Portuguese government has been actively supporting the technology sector through various incentives.”
Quality of Life: “Portugal offers a high quality of life, with a pleasant climate, beautiful landscapes and a rich cultural heritage. This can help to attract and retain employees.”
Language and Communication Culture: “Many people in Portugal are fluent in English, which makes it a culture that can interact easily with all corners of the world.”
Critical Manufacturing, part of the ASMPT Group, develops sophisticated manufacturing extension systems (MES) for semiconductors in Porto and is listed in the Deloitte Technology Fast 50. Asked why the country makes sense for its operations, Francisco Almada Lobo, CEO and co-founder, tells Site Selection, “Portugal presents a strategic growth location for our company in the software for high-tech industries, including semiconductor, thanks to its exceptional blend of skilled technical talent, multilingual capabilities and cost-effectiveness. The country’s stable political climate and supportive regulatory environment, coupled with proactive initiatives by entities like AICEP Portugal, create an ideal ecosystem for innovation and business expansion. Portugal’s balance of economic advantages and a strong commitment to technological advancement aligns seamlessly with our vision for sustainable growth and global integration.”
From Upstart to Anchor: One Entrepreneur’s Story
No one personifies the Portuguese tech innovation and startup vibe better than Francisco Rodrigues, CEO of photonics firm PICadvanced (PIC stands for “photonic integrated circuits”). Founded in 2014 and based at PCI – Creative Science Park in Ílhavo alongside the University of Alveiro incubator, the company is developing optoelectronic transceivers for a new telecommunications network standard called NG-PON2 (Next-Generation Passive Optical Network 2) and has received major backing from Verizon Ventures. It also has a new North America office in Fort Lauderdale, Florida.
The company, which has grown from an original pod of 15 people to 50 today (including 35 engineers) and attained revenue of €34 million in 2023, was ranked No. 28 in Deloitte’s Fast50 ranking of Portugal startups last year, the same year Rodrigues was honored with EY’s Entrepreneur of the Year - Innovation Award.
“PIC Technology Center of Excellence is part of a major project we are working on pushing forward,” Rodrigues says in an email, “which is to locate an Electronic and Photonic Entrepreneurship Hub in the Creative Science Park that would work as our headquarters while sharing space with advanced facilities with other existing or new photonics and electronics players.”
Rodrigues says when PICadvanced started 10 years ago, “the number of startups was already increasing and in these 10 years new infrastructures and clusters were created in Portugal, fostering the environment for new technology companies backed up with new VC firms and major technology events in Portugal such as Web Summit, which helped to put Portugal in the spotlight of technology. For companies like PICadvanced that are deep tech and hardware related, more infrastructure and initiatives are required such as the excellence center we are putting together as well as VC funds further diversified from software fields.”
Other startups in the sector include SiliconGate, PETsys Electronics, Powertools Technologies, Koala Tech, IOBundle and IPblop.
Rodrigues highlights Portugal’s newly released, four-year “National Strategy for Semiconductors,” which defines these lines of action:
“Strengthening specialized training and specific skills in the area of microelectronics and semiconductors, one of the key worldwide challenges that the sector faces at the moment;
“Expanding the national ecosystem for chip design and advanced packaging, areas where Portugal already has vast know-how and international presence;
“Increasing technology transfer in emerging areas, namely for photonic integrated circuits, co-integration of emerging technologies, flexible and sustainable electronics and large-scale sensor manufacturing, promoting a ‘lab to fab’ approach.”
PICadvanced is part of the microelectronics Portuguese agenda consortium and a flagship company in Portugal in photonics and in the field, alongside major players such as Synopsys, Monolithic Power Systems (which just opened a design center in Porto last September) and outsourced semiconductor assembly and testing services (OSAT) company AMKOR Technology Portugal.
Located in Vila do Conde, ATEP Amkor has 750 employees, 200 of whom are engineers.
The company in January launched a strategic European partnership with GlobalFoundries (GF) with a ribbon cutting. SinceFebruary 2023, GF has transferred 50 tools from its Dresden site to Amkor’s site near Porto.
“The new partnership between the two companies redefines the landscape of semiconductor manufacturing by enabling a first comprehensive EU supply chain — from semiconductor wafer production at GF to OSAT services at Amkor,” Amkor announced.
Overall, GF is transferring entire lines from Dresden to Amkor’s Porto plant “to establish the first at-scale back-end facility in Europe.” Amkor also recently broke ground on a new factory expansion in Porto.
“Amkor has more than 40 years of automotive expertise and is IATF-certified across seven countries around the world,” said Kevin Engel, Amkor’s executive vice president, Business Units. “Amkor brings the scale and expertise of its global advanced packaging footprint to this exciting collaboration. Our partnership with GlobalFoundries signals our common goal to stabilize a robust and resilient European automotive supply chain.”
“GF Dresden is Europe’s largest and most advanced semiconductor manufacturer and Amkor is the only Tier 1 OSAT in Europe,” said Dr. Manfred Hortsmann, GlobalFoundries’ senior vice president and general manager European Fabs. “Together, we enable one of the most robust chip supply chains outside of Asia, creating a more resilient European supply chain for key end markets including automotive.”
Examples of that automotive demand include Bosch (the largest consumer of chips in Portugal), BorgWarner and Mitsubishi Fuso Truck Europe, the Daimler Truck-owned operation in Tramagal that celebrates its 60th anniversary this year.
The automotive sector is responsible for almost 8.5% of Portugal’s industry and 2.1% of the production of the Portuguese economy, AICEP reports. The automotive components industry alone has grown by 200% over the past 15 years and as of 2021 tallied around 360 companies employing over 61,000 people, with 85% of its products exported.
More to Come
Asked how his firm aligns with the new national strategy, Rodrigues answers like someone who hovers between a wave and a particle: “On the one hand, PICadvanced through its innovative roadmap in photonic integration defies the state of the art and places disruptive technology and building blocks in the market not only through physical products but also in terms of design/simulation and packaging of PICs,” he says. “On the other hand,
PICadvanced aligns with R&D centers and RTOs [research and technology organizations] of Portugal and Europe cooperating in research projects and national and international levels to develop groundbreaking technology.” Prominent among those RTOs is the International Iberian Nanotechnology Laboratory in the northern Portugal city of Braga, home to 480 personnel from 30 countries engaged in nearly 220 ongoing funded R&D projects, several of them in the semiconductor sector.
Rodrigues describes AICEP as “a key organism in business development of companies, and PICadvanced is not an exception. The organization looks forward, making relevant connections in the defined markets and segments identified in conjunction with the company and has been fully available to cooperate with PICadvanced since an early stage to ensure our success.” That includes helping finance two internationalization projects from PICadvanced to help it establish new markets and customers through activities such as trade shows.
What’s next? Asked about Portugal ecosystem needs, Celio Albuquerque of Synopsys says the very presence of ecosystem enablers like Synopsys can also bring more semiconductor innovation and talent to the country. “Additionally,” he remarks, “the region can benefit from ongoing workforce training and education, as well as a clear, supportive policy framework.”
The country’s talent continues to be among its top assets, he reiterates, reinforced by programs such as the Synopsys Academic Research Alliance (SARA) with several universities, its own Academy program and a nationwide high school program called “Electronics for All.”
“Synopsys continues to believe in the talent quality in Portugal,” Albuquerque says, “and it expects to continue nurturing and investing in our operations in both local office locations, Porto and Lisbon.”
It’s no coincidence that the global ecosystem of the $520 billion semiconductor industry needs to be as finely tuned as the pathways etched on a microchip.
Accordingly, as the industry is projected to grow by more than 13% in 2024, there are many valuable roles to play and many pathways toward success. In a European marketplace surging on the power of the EU Chips Act and a wave of new corporate investment, Portugal’s performance is receiving rave reviews thus far.
Micro- and nano-electronics enable the generation of at least 10% of European and global GDP, according to the European Semiconductor Industry Association, which confirms that the R&D-intensive European semiconductor ecosystem supports approximately 200,000 jobs directly and up to 1 million induced jobs in systems, applications and services in Europe.
That ecosystem also welcomes talent from elsewhere to help fill occupational gaps in an industry that requires up to 15,000 new skilled workers in the next few years in response to corporate investments in the EU and the EU Chips Act’s target of doubling the EU’s share of the global market to 20% by 2030. In November 2023, the EU Commission proposed the EU Talent Pool to support the recruitment of job seekers from third countries in EU-wide shortage occupations.
Is Portugal’s relative openness to international talent immigration a positive aspect of maintaining and growing semiconductor operations there? Celio Albuquerque certainly thinks so.
“Yes, it is certainly a positive aspect for maintaining and growing operations there,” says Albuquerque, vice president of R&D Engineering for the Solutions Group at California-based Synopsys, a silicon-to-systems design firm with operations in Porto and Lisbon.
“This policy allows companies to attract and retain top talent from around the world, fostering a diverse and inclusive workforce that can drive innovation. It also helps to fill any skills gaps in the local workforce, ensuring that companies have the necessary expertise to grow and succeed. This is especially beneficial for tech companies like Synopsys, which rely on highly skilled employees.”
In business for more than 35 years and based in the Silicon Valley community of Sunnyvale, Synopsys employs more than 20,000 people worldwide and reports annual revenues topping $5.5 billion. The company is celebrating 15 years in Portugal this year.
“We established locations in Lisbon and Porto as part of our global expansion strategy to tap into Portugal’s growing technology sector,” Albuquerque says. “Our Portugal team includes members of our Design IP business, which is a growing segment of our business, providing pre-designed components that our semiconductor customers can incorporate into their products rather than designing those circuits themselves.
What has kept the company in those locations over those 15 years? Albuquerque says these factors distinguish the company’s Portugal operations from its other global sites, while also adding value to overall operations:
Talent Pool: “Portugal has a high number of well-educated, skilled, and multilingual professionals, especially in the fields of engineering and technology. This provides Synopsys with a rich and diverse talent pool to recruit from.”
Strategic Location: “Portugal’s strategic location at the crossroads of Europe, Africa, Asia and the Americas allows Synopsys to easily serve clients across these continents. Its position in the same time zone as the UK and Ireland also facilitates synchronous communication with European clients.”
Innovation Hub: “Portugal is becoming an increasingly important hub for technology and innovation, with an evolving startup ecosystem and a growing number of tech events and conferences. This vibrant tech scene fosters creativity and collaboration, which can benefit Synopsys’ operations.”
Cost Efficiency: “Operating costs in Portugal are generally lower than in many other European countries.”
Government Support: “The Portuguese government has been actively supporting the technology sector through various incentives.”
Quality of Life: “Portugal offers a high quality of life, with a pleasant climate, beautiful landscapes and a rich cultural heritage. This can help to attract and retain employees.”
Language and Communication Culture: “Many people in Portugal are fluent in English, which makes it a culture that can interact easily with all corners of the world.”
Critical Manufacturing, part of the ASMPT Group, develops sophisticated manufacturing extension systems (MES) for semiconductors in Porto and is listed in the Deloitte Technology Fast 50. Asked why the country makes sense for its operations, Francisco Almada Lobo, CEO and co-founder, tells Site Selection, “Portugal presents a strategic growth location for our company in the software for high-tech industries, including semiconductor, thanks to its exceptional blend of skilled technical talent, multilingual capabilities and cost-effectiveness. The country’s stable political climate and supportive regulatory environment, coupled with proactive initiatives by entities like AICEP Portugal, create an ideal ecosystem for innovation and business expansion. Portugal’s balance of economic advantages and a strong commitment to technological advancement aligns seamlessly with our vision for sustainable growth and global integration.”
From Upstart to Anchor: One Entrepreneur’s Story
No one personifies the Portuguese tech innovation and startup vibe better than Francisco Rodrigues, CEO of photonics firm PICadvanced (PIC stands for “photonic integrated circuits”). Founded in 2014 and based at PCI – Creative Science Park in Ílhavo alongside the University of Alveiro incubator, the company is developing optoelectronic transceivers for a new telecommunications network standard called NG-PON2 (Next-Generation Passive Optical Network 2) and has received major backing from Verizon Ventures. It also has a new North America office in Fort Lauderdale, Florida.
The company, which has grown from an original pod of 15 people to 50 today (including 35 engineers) and attained revenue of €34 million in 2023, was ranked No. 28 in Deloitte’s Fast50 ranking of Portugal startups last year, the same year Rodrigues was honored with EY’s Entrepreneur of the Year - Innovation Award.
“PIC Technology Center of Excellence is part of a major project we are working on pushing forward,” Rodrigues says in an email, “which is to locate an Electronic and Photonic Entrepreneurship Hub in the Creative Science Park that would work as our headquarters while sharing space with advanced facilities with other existing or new photonics and electronics players.”
Rodrigues says when PICadvanced started 10 years ago, “the number of startups was already increasing and in these 10 years new infrastructures and clusters were created in Portugal, fostering the environment for new technology companies backed up with new VC firms and major technology events in Portugal such as Web Summit, which helped to put Portugal in the spotlight of technology. For companies like PICadvanced that are deep tech and hardware related, more infrastructure and initiatives are required such as the excellence center we are putting together as well as VC funds further diversified from software fields.”
Other startups in the sector include SiliconGate, PETsys Electronics, Powertools Technologies, Koala Tech, IOBundle and IPblop.
Rodrigues highlights Portugal’s newly released, four-year “National Strategy for Semiconductors,” which defines these lines of action:
“Strengthening specialized training and specific skills in the area of microelectronics and semiconductors, one of the key worldwide challenges that the sector faces at the moment;
“Expanding the national ecosystem for chip design and advanced packaging, areas where Portugal already has vast know-how and international presence;
“Increasing technology transfer in emerging areas, namely for photonic integrated circuits, co-integration of emerging technologies, flexible and sustainable electronics and large-scale sensor manufacturing, promoting a ‘lab to fab’ approach.”
PICadvanced is part of the microelectronics Portuguese agenda consortium and a flagship company in Portugal in photonics and in the field, alongside major players such as Synopsys, Monolithic Power Systems (which just opened a design center in Porto last September) and outsourced semiconductor assembly and testing services (OSAT) company AMKOR Technology Portugal.
Located in Vila do Conde, ATEP Amkor has 750 employees, 200 of whom are engineers.
The company in January launched a strategic European partnership with GlobalFoundries (GF) with a ribbon cutting. SinceFebruary 2023, GF has transferred 50 tools from its Dresden site to Amkor’s site near Porto.
“The new partnership between the two companies redefines the landscape of semiconductor manufacturing by enabling a first comprehensive EU supply chain — from semiconductor wafer production at GF to OSAT services at Amkor,” Amkor announced.
Overall, GF is transferring entire lines from Dresden to Amkor’s Porto plant “to establish the first at-scale back-end facility in Europe.” Amkor also recently broke ground on a new factory expansion in Porto.
“Amkor has more than 40 years of automotive expertise and is IATF-certified across seven countries around the world,” said Kevin Engel, Amkor’s executive vice president, Business Units. “Amkor brings the scale and expertise of its global advanced packaging footprint to this exciting collaboration. Our partnership with GlobalFoundries signals our common goal to stabilize a robust and resilient European automotive supply chain.”
“GF Dresden is Europe’s largest and most advanced semiconductor manufacturer and Amkor is the only Tier 1 OSAT in Europe,” said Dr. Manfred Hortsmann, GlobalFoundries’ senior vice president and general manager European Fabs. “Together, we enable one of the most robust chip supply chains outside of Asia, creating a more resilient European supply chain for key end markets including automotive.”
Examples of that automotive demand include Bosch (the largest consumer of chips in Portugal), BorgWarner and Mitsubishi Fuso Truck Europe, the Daimler Truck-owned operation in Tramagal that celebrates its 60th anniversary this year.
The automotive sector is responsible for almost 8.5% of Portugal’s industry and 2.1% of the production of the Portuguese economy, AICEP reports. The automotive components industry alone has grown by 200% over the past 15 years and as of 2021 tallied around 360 companies employing over 61,000 people, with 85% of its products exported.
More to Come
Asked how his firm aligns with the new national strategy, Rodrigues answers like someone who hovers between a wave and a particle: “On the one hand, PICadvanced through its innovative roadmap in photonic integration defies the state of the art and places disruptive technology and building blocks in the market not only through physical products but also in terms of design/simulation and packaging of PICs,” he says. “On the other hand,
PICadvanced aligns with R&D centers and RTOs [research and technology organizations] of Portugal and Europe cooperating in research projects and national and international levels to develop groundbreaking technology.” Prominent among those RTOs is the International Iberian Nanotechnology Laboratory in the northern Portugal city of Braga, home to 480 personnel from 30 countries engaged in nearly 220 ongoing funded R&D projects, several of them in the semiconductor sector.
Rodrigues describes AICEP as “a key organism in business development of companies, and PICadvanced is not an exception. The organization looks forward, making relevant connections in the defined markets and segments identified in conjunction with the company and has been fully available to cooperate with PICadvanced since an early stage to ensure our success.” That includes helping finance two internationalization projects from PICadvanced to help it establish new markets and customers through activities such as trade shows.
What’s next? Asked about Portugal ecosystem needs, Celio Albuquerque of Synopsys says the very presence of ecosystem enablers like Synopsys can also bring more semiconductor innovation and talent to the country. “Additionally,” he remarks, “the region can benefit from ongoing workforce training and education, as well as a clear, supportive policy framework.”
The country’s talent continues to be among its top assets, he reiterates, reinforced by programs such as the Synopsys Academic Research Alliance (SARA) with several universities, its own Academy program and a nationwide high school program called “Electronics for All.”
“Synopsys continues to believe in the talent quality in Portugal,” Albuquerque says, “and it expects to continue nurturing and investing in our operations in both local office locations, Porto and Lisbon.”
