The semiconductor shortage that began as a result of the pandemic has affected all areas of electronics, including cars. Experience has shown that no country was prepared for this, in part because the supply of critical components was monopolized. Realizing that the world production of chipsets is concentrated mainly in several countries of East Asia (in the hands of TSMC and Samsung), the governments of different states have taken a number of measures to ensure self-sufficiency in the production of chipsets. Analytical agency Counterpoint has highlighted the solutions of key players in this market.
US political intervention
- The Biden administration introduced the Innovation and Competition Act.
- The authorities intend to spend $ 52 billion on the semiconductor sector.
- A 100-day analysis of the supply chain crisis was conducted (key semiconductor lines, advanced batteries in electric vehicles, regulatory changes).
- Created a $ 50 billion infrastructure plan covering incentives for semiconductor manufacturing, research and design, and the creation of the National Center for Semiconductor Technology.
EU political intervention
- A plan to create an “ecosystem” for chip manufacturing has been unveiled to remain competitive and self-sufficient.
- The plan is to develop a “European Chips Act” that will accelerate the development of advanced semiconductors across the EU.
- The new law provides for the development of a semiconductor research strategy and the consolidation of European efforts to produce chips, as well as a framework for international cooperation.
- By 2030, plans to produce at least 20% of the world’s semiconductors (by value). In 2020, this figure was twice as low.
South Korea’s political intervention
- The second largest computer chip manufacturing country after Taiwan, it announced $ 451 billion in domestic semiconductor manufacturing over the next decade.
- The investment will be spearheaded by the mastodons Samsung Electronics and SK Hynix, according to a plan drawn up by the government. Also, funds are provided for another 151 companies.
- The investment will focus on the K-semiconductor belt, a newly named region south of Seoul that is slated to be the epicenter of South Korea’s semiconductor thrust.
Taiwan’s political interference
- Taiwan-based TSMC, the world’s largest manufacturer of contract microchips, is likely to invest $ 100 billion over the next three years to meet the growing demand for semiconductors.
- TSMC plans to improve its semiconductor foundry in Arizona, USA, which is one of the integrated manufacturing units outside Taiwan.
Japan’s political intervention
- The recently released Semiconductor and Digital Industry Policy was one step to strengthen its position as Japan’s share of semiconductor manufacturing has declined from 50% to 10% since the 1980s.
- The government has teamed up with TSMC and 20 local companies to build the plant by 2023.
India’s political intervention
- The authorities announced their interest and circulated documents requesting proposals from companies to open their manufacturing plants in India.
- A blueprint was unveiled to promote a manufacturing ecosystem to bridge the gap and strengthen the current position of the Make in India and Digital India programs.
- Recently, local government organizations have partnered with each other to launch the Semiconductor Startup Incubation and Acceleration Program.
- The Prime Minister of India met with the head of Qualcomm to discuss the need for a diversified semiconductor supply chain, as well as topics related to 5G, vRAN and digital transformation.
Current situation
Based on current production and demand trends, analysts predict that semiconductor shortages will persist until the first half of 2022. Factories are already raising prices for semiconductor wafers, which is driving up prices and chipset companies. For example, TSMC, one of Apple’s key suppliers, recently announced a 20% increase in chipset prices.
Most of the advanced semiconductor technologies are developed in the United States, but the lion’s share of production is located in East Asia (especially in Taiwan and South Korea – more than 83% of world revenue from foundries comes from companies headquartered in these countries). As manufacturing facilities, equipment and materials are concentrated in several countries, the economics of semiconductor manufacturing has become an important geopolitical tool.
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