SOPOT, Poland, March 17 (Reuters) - Europe's

semiconductor industry must invest in more automated and larger

300-millimeter wafer fabs to counter growing competition from

Chinese rivals in power and analog chips, an Infineon

Technologies executive said last Friday.

Speaking at a conference for semiconductor industry

executives in Poland, Thomas Altenmueller, Vice President

Manufacturing Analytics at Infineon, said that Chinese

manufacturers were rapidly gaining capacity and expertise in

areas historically dominated by European chipmakers.

"They are learning fast. They have the capacity,"

Altenmueller said. "It is super serious."

Altenmueller said the shift toward power and analog chips by

Chinese companies was pushed by export restrictions on more

advanced semiconductor tools like ASML's EUV lithography

machines.

EUROPE MUST SCALE UP AND CONSOLIDATE OPERATIONS

Europe must scale up and consolidate its operations,

utilising automation, particularly with modern 300-millimetre

wafer fabs to increase economy of scale and lessen the impact of

higher labour costs, Altenmueller said.

At the same conference, executives from STMicroelectronics

laid out plans for automating older fabs that cannot

be fully modernised, deploying robots to increase efficiency.

While Europe's semiconductor firms lack market share in AI

accelerators, which are dominated by Nvidia ( NVDA ), Samsung

and TSMC, Altenmueller said

energy-efficient power delivery chips, crucial for managing the

rising energy demands of data centers, had vast growth

potential.

The European Union's first Chips Act aimed to increase the

bloc's share of global chip production from 10% to 20% by 2030.

It primarily focused on new projects and "first-of-a-kind".

Altenmueller said Europe's existing profitable plants should

not be overlooked, as they remain essential to its global

competitiveness.

The EU is now working on a refreshed Chips Act 2.0.

"Europe's competitiveness ultimately resides in its

traditional industrial strengths in automotive and industrial

chips," Altenmueller said. "Don't forget our strengths."