Hardware meets software in a high-tech merger | KPMG | TT

Hardware meets software in a high-tech merger

Hardware meets software in a high-tech merger

Leuven-based nano-electronics center imec merges with Ghent-based software cluster iMinds


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Imec's Luc Van den Hove

With about 2,500 employees, imec in Leuven (Belgium) is the world's largest nano-electronics center, but CEO Luc Van den hove is already taking the next step.

The merger with iMinds in Ghent (1,000 employees) is intended to prepare imec for the future: "We are on the verge of enormous disruptions.

"Flashback to the early 1980s: inspired by what they saw during a study trip in Silicon Valley, a group of ambitious young researchers in Leuven founded the Interuniversity Microelectronics Center (IMEC). That was in 1984, just under three years after IBM launched its first PC with MS-DOS. 

Today, when you enter imec, you feel like you are entering an international microcosm. Of the 2,500 employees, 300 are doctoral students from all over the world and another 500 are residents from international research partners like Samsung, Intel, and Panasonic. They all come to Leuven to do high-tech nano-electronics research. This is where the chip technology is developed, in cooperation with over 150 universities and 74 countries, that will later end up in our smartphones or smartwatches. The place is virtually bursting at the seams with enterprise and, round-the-clock activity in the cleanrooms for research.

Silicon from Leuven

The contrast with the early days in the 1980s could hardly be greater – imec is now the largest nano-electronics research center in the world. And a large part of Silicon Valley now comes to Leuven for their silicon (chip technology). CEO Luc Van den hove explains why:

"We have indeed become an international brain magnet," says Van den hove, "surrounded by a business cluster and with more than 40 spin-offs we have developed into a global leader over the course of 32 years.

"Government investment"

That's matched by a strong budget. "Structural funding from the Flemish government accounts for 11% of our €440 million budget. This funding is essential because it enables us to invest in long-term projects for which the industry may not see any immediate need, but where we feel that they point the way to the future. If our engineers had not started working on the integration of biotechnology and chip technology 15 years ago, we would never have been at the forefront of the enormous revolution resulting from the merger of these two domains, as we are now."

Thinking ahead is clearly the message, and the support is good business for the government. Luc Van den hove: "The impact and the prestige of imec also permeate through the region, with hundreds of SMEs collaborating with our research center. Directly or indirectly, this creates more than 5,000 jobs. We have also calculated that we generate €200 million in tax revenue every year. The government could hardly wish for a better investment.

"International cross-pollination"

At the same time, imec's success is based on cooperation between university research and practical applications in the industry. Chip manufacturers, chip designers, and application developers from all over the world come to nestle in the Leuven ecosystem, where cross-pollination is shaping the technology of the future. "By thinking internationally, we automatically enable our own region to benefit from our growth," says Van den hove.

That growth is bound to lead to large changes. Luc Van den hove: "Moore's law, dictating that the number of transistors on a chip doubles every 18 months due to new developments, is still valid. We are already putting up to 4.5 billion transistors on a single chip. Those transistors are only 10 nanometers wide – that's ten millionths of a millimeter. More than ever, the keyword is miniaturization, which is what makes chips more performant and cheaper and enables the technology to penetrate further and further into our lives. The Internet of Things is the next big trend. In the course of time, all machines will be online, blurring the difference between conventional hardware (like your smartphone) and software (the apps on your smartphone).

"Software meets hardware"

That brings us to the merger with Ghent-based iMinds, which has 1,000 employees and its roots primarily in software development. Along with app development, that encompasses data systems, security, encryption, and so on. Software meets hardware: a match made in heaven? 

Luc Van den hove is convinced: "Unlike many other mergers, which are often imposed from outside, this is a good-news story. It's all about growth and not about cost reduction. Just consider the automobile industry, where we are evolving toward driverless vehicles with dozens of integrated radars and sensors. Or the healthcare sector, where in the future your smartwatch will monitor your blood pressure and temperature and warn your doctor if you have a problem and coach you. And a chip that will do a complete blood analysis in 10 minutes and that sends the results via the cloud to your doctor. That are currently processes that still take 2 days even up to 1 or 2 weeks. In all these examples, you see that the integration of hardware (in the form of chips) and software apps opens up an enormous market and will unleash a real revolution in many sectors. With this merger we are preparing ourselves for that future."

© 2018 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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