Translated with DeepL
Semiconductors are used in industrial equipment, medical technology and communication systems - but Switzerland produces hardly any of the raw materials required for these applications itself. In a motion, National Councillor Elisabeth Schneider-Schneiter is now calling for critical raw materials to be systematically included in free trade agreements. The Federal Council believes this is unnecessary. We spoke to Alessa Hool (ESM Foundation) about Switzerland's actual vulnerability.
How vulnerable is Switzerland today when it comes to semiconductors and critical raw materials?
When we talk about critical raw materials, we must first say that every country defines them slightly differently and there is no official definition of raw materials that are critical for Switzerland. I am referring here to raw materials that are often referred to as "technology metals": rare earths, lithium, cobalt, nickel, gallium or germanium.
Many of these technology metals come from a small number of countries, primarily China. Switzerland produces practically none of these metals itself and is heavily reliant on imports. The situation is similar with the components that contain these raw materials - including compound semiconductors and chips. If an important supplier fails, there are often hardly any short-term alternatives. Switzerland is therefore clearly vulnerable.
Political vulnerability is also high: Switzerland has only limited leverage over major powers such as China, the USA and the EU. To make matters worse, although Switzerland is closely integrated into European value chains, it is not a member of the EU. It is affected by EU export controls and sanctions, but has no secure access to common crisis instruments such as coordinated emergency procurement.
The situation is somewhat mitigated by the fact that Swiss industry often only requires relatively small volumes and is active in highly specialised niches. Added to this are high purchasing power, good creditworthiness and a strong research and innovation base. Although these factors do not make Switzerland crisis-proof, they do give it additional room for manoeuvre to react to supply disruptions.
Which Swiss sectors are particularly sensitive from a security of supply perspective?
To date, there has been no systematic assessment of the vulnerability of individual Swiss sectors. However, we can use European and international analyses as a guide. The areas that are particularly vulnerable are those that involve a lot of electronics and precision technology: the mechanical, electrical and metal industries, robotics and sensor technology, the medtech and watchmaking industries, the energy and mobility sectors and security-related areas such as defence and critical infrastructure.
The risk is particularly high in the area of semiconductor technology: chips are central to industrial plants, medical technology, vehicles, communication and financial systems. They are also particularly at risk because high-end chips are one of the few modern technologies in which China does not have the technological upper hand - and because chips are militarily relevant. Export controls and trade bans on chips have already had an impact on the raw materials required for them on several occasions, and this could be exacerbated in the future.
Which raw materials are particularly critical for semiconductors - and where are there currently the greatest risks of shortages?
Gallium and germanium are particularly noteworthy. They are key for compound semiconductors in high-frequency, power and optoelectronics - for example for 5G, radar and LED applications. China dominates production and processing and has introduced export restrictions in 2023. Given the military importance of these raw materials, further restrictions are a plausible scenario.
Metals for special alloys, contacts and capacitors, such as nickel, tantalum and tungsten, are also exposed. There are also a number of semi-finished products for chip production for which there is a strong market concentration - such as high-purity silicon wafers, which are only produced by a few manufacturers worldwide in Japan, Taiwan, Korea and Europe.
There is an often underestimated dependency on process media: chip production requires noble gases such as neon as well as highly specialised chemicals for etching and cleaning steps. As these substances are often difficult to store and come from geopolitically sensitive supply chains, they represent another critical bottleneck.
Finally, speciality metals such as indium, hafnium, ruthenium and certain rare earths are relevant in the chip ecosystem. They are only used in very small quantities, but are technically indispensable for individual layers or gate materials. If one of these elements is missing, entire production steps can come to a standstill.
