The last few months have seen a surge of public funding in the semiconductor industry, as governments attempt to expedite recovery from the supply chain crisis and increase self-sufficiency. A growing number of countries see their semiconductor ecosystems as central to economic evolution, sustainability and in some cases security.
In the first of our Global Semiconductor Funding Round-ups, we highlight key government investments and initiatives in the chip sector over the 12 months from March 2022 to March 2023:
United Kingdom
The new Department for Science, Innovation and Technology (DSIT) has set out the UK Science and Technology Framework. The plan commits £370 million to five technologies, including semiconductors, by the year 2030. However, this hasn’t stopped UK-based chipmakers from calling for additional funding to prevent the country from falling behind in the global market.
United States
In April 2022, the US signed the CHIPS and Science Act into law. The act will invest $250 billion (£227 billion), boosting fab capacity, catalysing R&D and supporting the creation of regional hi-tech hubs. The funding will also go towards expanding the country’s science, technology, engineering, and math (STEM) workforce.
Over $52.7 billion (£42 billion) of this funding has been allocated to “American semiconductor research, development, manufacturing, and workforce development”. This includes $2 billion (£1.6 billion) for legacy chips used in automobiles and defence systems. The US car manufacturing sector was one of the worst affected by the chip shortage that followed the Covid-19 pandemic.
European Union
The EU has moved to address its own regional chip deficit. Adopted in December 2022, the EU Chips Act aims to strengthen the EU’s competitiveness in semiconductor technologies. The EU’s share of the microchip market currently stands at 10%, and the Act aims to increase its portion of the global market to at least 20% by the year 2030.
Europe’s semiconductor ecosystem will be strengthened by the mobilisation of €43 billion (£37 billion) in public and private investments. Its three main pillars of action are 1) the public-private partnership Chips for Europe; 2) a new framework for attracting investment; and 3) a mechanism to monitor and coordinate supply in crisis situations.
China
According to reports, China’s government was working on a support package of more than 1 trillion yen (£114 billion) for its semiconductor industry. However, this plan is said to have stalled in recent weeks, with funds being paused or redirected.
Taiwan
Taiwan accounts for 92% of the world’s most advanced (nodes below 10 nanometres) semiconductor capacity. Despite this strong market position, the country’s chip sector still faces the stern challenges of a talent shortage and global competition. A recent report revealed Taiwan’s National Science and Technology Council has plans for a raft of new funding to progress “talent training and research funding”, including an upgrade of facilities by the year 2035.
Spain
In addition to the EU’s commitment, individual member states have been investing in their own chip sectors. Spain announces plans to inject €11 billion (£9.6 billion), emphasising the “global geostrategic importance” of semiconductors and a determination that Spain “will not lose the race to the most advanced technology”. The funding, which was announced in April 2022, will be partly financed by the EU’s pandemic recovery fund.
India
A $10 billion (£8 billion) incentive plan for chip and display production that was originally outlined in December 2021 is still taking shape. India recently signed a memorandum of understanding with the US as it aims to become a key player in the global supply chain.
That concludes our Global Semiconductor Funding Report. Over the coming months, we will continue to monitor government investments in the chip sector.
