Chips are vital to the development of technology, and the world is beginning to stimulate their production. USA invests in the industry a one-time huge amount: about $77 billion in the form of subsidies and tax breaks for local producers. Other countries also have their own programs.
In Asia, the semiconductor industry has been supported for decades. According to one estimate, China plans to invest more than $150 billion in it by 2030. South Korea aims to attract about $260 billion in investment over the next 5 years. The EU will invest more than $40 billion in chip manufacturing, while Japan will spend about $6 billion to double its chip revenue by the end of the decade.
One of the largest current chip manufacturers, Taiwan, has about 150 government-funded projects in this field over the past 10 years. Meanwhile, a $5 billion chip manufacturing plant was established in Singapore this year.
Chips are embedded in every electronic device and are critical to many industries, from smartphones and automobiles to military equipment and healthcare. Recent shortages due to delays in the supply of microcircuits from Asia due to the COVID-19 pandemic have shown the importance of in-house production.
In addition, according to forecasts, the need for chips will increase significantly in the coming years. According to the consulting company International Business Strategies Inc. the industry’s annual revenue will more than double by 2030 and reach $1.35 trillion.
The United States currently holds 13% of the global chip manufacturing market. China, Taiwan, South Korea and Japan have about three-quarters of the world’s capacity. They stimulate production by compensating costs for their own enterprises, providing subsidies and tax breaks.
A few decades ago, the US and Europe had better market positions, but the lack of subsidies, more expensive labor and utilities caused a gap with Asia. New investment in the industry should fix this.
“Chips are at the centre of the global technological race,” says European Commission President Ursula von der Leyen.
We remind you that Intel is waiting for the adoption of legislation in the US that will support domestic chip manufacturers. The company hopes to receive state funding in 2023 and use it to complete a new plant in Ohio.