The shortage of semiconductor chips has been one of the key issues for the tech, electronics and automotive industries over the past two years. The unavailability of chipsets and electronic components had a significant impact on the business in terms of revenue and customer experience.
In response to higher customer demand and supply chain crises, the tech, electronics and automotive industries have begun developing short- and long-term strategies to simplify chip production and shorten lead times.
In addition to this, government authorities are also aware that the shortage of semiconductor chips affects businesses and the economy at a higher level. As a result, the US, UK, EU, China, Japan, India and South Korea have taken several initiatives to support companies in developing new production facilities around the world through changes to existing regulations, policies and significant funding.
European Chip Act: On February 8, 2022, the European Commission announced the “Chip Act”, which will help companies enhance research and development (R&D), innovation and development in the semiconductor industry. A fund of around 43 billion euros ($46 billion) has been announced to support the initiative through public and private investment. It will help the EU achieve its goal of reaching a 20 percent chip market share by 2030.
CHIPS for America Act: In January 2021, Congress passed the Creating Beneficial Semiconductor Production Incentives for America (CHIPS) Act. Under this initiative, the Senate passed the United States Innovation and Competition Act (USICA) in June 2021 to provide $39 billion in funding for semiconductor production program development and an additional $11.2 billion for R&D activities in the semiconductor industry.
Canadian Semiconductor Action Plan: Roadmap to 2050: The Semiconductor Council of Canada has released a comprehensive action plan to transform the domestic semiconductor industry. The action plan includes strengthening and diversifying supply chains, developing onshore manufacturing, building unique specialisations in design and R&D as well as electric vehicles (EVs), batteries and sensors, and fostering innovation through investment and government funding. The Canadian government will invest about $240 million to support the country’s expansion into photonics and semiconductor manufacturing.
China’s $1.4 trillion investment plan aims to become a leader in tech: The Chinese government has invested about $150 billion in the Chinese semiconductor industry in its 14th Five-Year Plan (2021-2025) strategic industries including $1.4 trillion). In March 2021, the Shenzhen government announced an investment of US$2.3 billion and a 23% stake in China’s leading wafer foundry firm SMIC Integrated Circuit Manufacturing Co., Ltd.
Korean chipmakers to invest $47.36 billion to compete with global leaders: The Korea Semiconductor Industry Association has announced investment plans for 2022 that include chipmakers such as Samsung Electronics and SK Hynix. South Korea plans to invest 510 trillion won ($452 billion) in chips by 2030.
Japan approves 774 billion yen ($6.8 billion) in domestic semiconductor investment funding: The package consists of three parts, including 617 billion yen for innovative chip manufacturing capacity and 47 billion yen for traditional production (analog chips and power management components) and 11 billion yen for research and development of next-generation silicon.
India gets $20 billion bid for chip factory investment: India has received a proposal for a joint venture between Vedanta Foxconn and Hon Hai Precision Industry, IGS Ventures and ISMC to invest $13.6 billion to build a semiconductor chip production plant. In addition to this, the government also plans to invest $5.6 billion under the Semicon India Program.
