Semiconductors: Brazil gains prominence in US-China dispute

The United States is interested in promoting investments in the semiconductor chain in Brazil to reduce dependency on Asian countries and maintain the lead in the technological war against China. The country has approved a US$52 billion incentive to reduce dependency on suppliers in the eastern continent.

Semiconductors are essential components of modern technology such as cell phones, self-driving cars, advanced computing, drones, and military equipment. There was a worldwide shortage of semiconductors during the Covid-19 pandemic, and many countries are looking for ways to reduce dependency on imports and start having geographically closer suppliers.

More than 60% of US companies have chip manufacturing in other countries, primarily in Asia. In addition, the finishing phase is mostly carried out abroad.

US investment would come with various restrictions on exporting or doing business with China. Companies that receive US funds are barred for ten years from participating in any business involving the production or expansion of production capacity of certain semiconductors in China.

Brazilian chip industry

Brazil has 11 companies in the semiconductor manufacturing chain, but only at the back end, which is the final stage of production. The national industry does not operate on the front-end, which consists of component manufacturing.

The country still does not have the conditions to become a world player, but with partnerships it can occupy the rings in the global supply chain. The Brazilian government is considering reopening the Advanced Electronics Center of Excellence (Ceitec), a state-owned semiconductor company that went into liquidation under the previous administration.

The country is trying to promote the development of the chip industry locally through measures such as forming a working group to discuss public policy, reducing bureaucracy and partnering with foreign companies to build factories to attract investment to fill the gap. local infrastructure

With investment and technology transfer, the country could start producing 14 nanometer chips to supply the domestic auto industry within a period of 10 to 15 years.