Industry reviews chip production map to face shortages and geopolitical risk

THE pandemic and the war between Russia and Ukraine are forcing a rearrangement in the global semiconductor production chain. The item has become a symbol of the difficulties of a globalized economy that has most of its manufacture concentrated in Asia. You chips they are essential for products ranging from toys and battery-operated radios to supercomputers and self-driving cars.

After a wave of factory closures due to lack of components, especially in automotive industryseveral governments, such as the United States and those of European Union, opened their vaults to attract new factories or expand existing ones. The US government expects US$52 billion Senate approval for this purpose. The EU has already released $45 billion.

The scarcity problem persists and is expected to extend until 2024 or 2025, albeit to a lesser extent.

For this year and next, 29 factories are scheduled to open. The investments of this group of companies total about R$ 140 billion, according to calculations by Semi, a global association of electronics manufacturers.

Most of them will be installed in Asia itself – eight in Taiwaneight in China and two in South Korea. The three countries already concentrate around 80% of world production, but experts expect that the deconcentration movement will change this map.

Other major destinations are USA and Germany. “Industry will continue to depend on Asia, but with new capabilities also going to other regions”, says Carlos Libera, a partner at consultancy Bain & Company. “At least part of the demand will be supplied by the factories that are emerging in other countries, even for safety reasons.”

THE Intel, one of the giants in the sector, this year announced two new factories in the US and one in Germany. Carlos Augusto Buarque, marketing director at Intel Brasil, explains that the group’s intention is to diversify its supply chain. “Our goal is to balance 50% of the supply in the Americas and Europe and the other 50% in Asia by 2030.”

Even Brazil, where the activity related to semiconductors is limited to the final assembly phase, called encapsulation, decided to participate in the movement, after several meetings with representatives from sectors such as automotive and electronics.

O Ministry of Economy promises to present a program this month or early next month that should contain measures such as exemptions on the semiconductor production chain, support for research and development, training and qualification of professionals and facilitation of imports. The sector currently has around 20 companies, according to the Brazilian Association of the Semiconductor Industry (Abisemi).

global race

The expansion of semiconductor production capacity was already in the plans of large corporations due to the super demand for chips that will come from technology 5GFrom eletric cars and autonomous, the internet of things and the artificial intelligence. “Sensors will be the great growth vector of the world industry”, says Márcio Kanamaru, leading partner in Technology, Media and Telecommunications at KPMG in Brazil.

Market report by Semi, the global association of electronics manufacturers, cites that 86 new factories or plant expansions already active have been announced for the period 2020 to 2024. Many of these projects and others announced during the pandemic are being executed before the what was imagined, says Kanamaru.

Of the plants that have already started activities – such as Bosch in Germany in 2021 – and of those under construction, 15 will be in Taiwan, 14 in China, nine in Europe, eight in the Americas, seven in South Korea, six in Japan and at least one in India.

A factory takes an average of two years to be ready. Some groups have not yet announced the locations of the new units. The pandemic anticipated several of the projects. According to Semi, these new plants should expand the current production capacity by 20% to 40%.

According to Kanamaru, the expectation of executives in the semiconductor sector is that in eight to ten years the industry will double its global production capacity, with more factories or increased productivity. “This increase is essential to nurture the new demands for digitization of the planet,” he says.

There is no data available on the installed capacity for semiconductors, but for the production stage called the foundry – when silicon “wafers” (wafers) are made, which are then processed and cut in various devices –, the increase must be of 43%. A study by Bain & Company shows that they will go from 90 million units per year in 2021 to 129 million in 2025.

With revenue of US$ 595 billion last year, the sector projects to reach US$ 1 trillion in 2030. Today semiconductors are the fourth most traded product in the world, behind crude oil, vehicles and parts and refined oil. A modern car, for example, has up to 1,500 semiconductors, reports KPMG. An electric car will have around 3,000, says an executive at Ford.

The home itself is being a big consumer. “All the home appliancesrefrigerators and microwaves with intelligence, sensors for temperature control, door activation, security and surveillance systems represent a very large consumption and will grow more”, predicts Kanamaru.


With nine factories in the US, Costa Rica, Ireland, IsraelChina, Vietnam and Malaysiathe American company Intel will invest US$ 38.2 billion in the three new units scheduled to start operating in 2025. The two American plants will give rise to a complex that in the future will be able to house up to eight factories, making it one of the largest semiconductor production in the world.

Another US$ 20 billion is being spent on two new operations in the Arizona complex, to start operations in 2024. The group has also set aside US$ 600,000 to expand production at the Costa Rica factory over the next three years, a unit that Intel traded with Brazil in the mid-1990s, but ended up choosing the other country in the region.

Bosch opened its second semiconductor factory in the German city of Dresden last July, with an investment of US$ 1.07 billion, the largest amount spent on a single project in the company’s history. In October, the group announced an additional US$ 428 million to expand this unit and the oldest one in Reutlingen. In addition, it is building a test center in Malaysia.

the korean Samsung also recently announced that it will build a new semiconductor factory in Texas (USA), a plan estimated at US$ 17 billion. Another company that will expand its operations in the American market is TSMC, a Taiwanese group considered the largest in the world in outsourced production. The company plans to spend $12 billion on a plant in Arizona and has several other projects, particularly in Asia.