Back to the future

1 min read

More governments around the world are now looking at the possibility of subsidising construction of semiconductor factories as the worldwide chip shortage continues to impact the auto and electronics industries.

Overly reliant on Taiwan there is now a growing consensus that the supply chain needs to be diversified and governments in the US, the European Union, India and Japan are seriously looking at the possibility of spending tens of billions of dollars on new chip fabrication plants.

At the corporate level, Intel has already announced plans to invest in new manufacturing facilities while TSMC and Samsung are looking at new factories in the US.

So, could we be seeing a government backed restructuring of the semiconductor industry? Perhaps, at the minimum we’re likely to see a shift away from the outsourcing of production to Korea and Taiwan.

Analysts are concerned, however, that if these investments do take place then we could end up with far too much capacity as each nation looks to secure its own critical industries such as communications and defence.