Having left for a long weekend, Bloomberg decided to sum up the interim results of the implementation of programs by different states to support the national semiconductor industry. The press in this area pays most attention to the efforts of the American authorities, but the specialized budgets of China and Europe can also hardly be called modest in size.
Image source: Micron Technology
Summarizing information from open and not so open sources, Bloomberg came to the conclusion that at the moment, out of approximately $39 billion intended to support the construction of chip production enterprises in the United States, only $32.8 billion has been distributed among applicants, and financing has been approved for only five companies. and in total more than six hundred showed up. The US government will send another $75 billion to builders of American chip manufacturing plants in the form of preferential loans; they can also count on a 25 percent tax deduction applied to their capital costs during the implementation period of the projects.
According to some estimates, the Chinese authorities are ready to provide local chip manufacturers with about $142 billion in financial support, but due to the confidentiality of information, it is difficult to determine its structural composition. Such an amount formally turns China into the largest country in the world in terms of specialized subsidies. The local industry is forced to develop in the context of ever-increasing sanctions from the United States and its allies; it does not have access to modern equipment for the production of chips, but is rapidly increasing its potential in the field of mature lithography. According to some forecasts, this could even lead to an overproduction of chips produced using old technical processes on a global scale.
Image Source: Bloomberg
Europe has its own “Chip Law,” which implies the allocation of $46.3 billion to support the region’s semiconductor industry. These funds are distributed unevenly across the bloc countries. Germany has already allocated $18.3 billion of the $21.5 billion owed to it, Spain is ready to provide $12.9 billion for the development of chip production on its territory. In third place is Italy with $4.6 billion, France provided $3.1 billion, the Netherlands limited itself to $2.7 billion, and Great Britain, standing apart, provided no more than $1.3 billion in subsidies. EU authorities expect private and public investment in the regional semiconductor sector to reach a combined $108 billion, and by 2030 the bloc will be responsible for 20% of advanced chip production.
Japan has long been concerned about reviving its status as a manufacturer of semiconductor products; of the allocated $25.3 billion in subsidies, about $16.7 billion have already been received by applicants. By 2027, Rapidus aims to launch production of 2nm products in Japan. TSMC is also expanding its presence in Japan and intends to build two more chip factories here in addition to the existing one. Local companies Sony and Denso also take part in the process.
Typically, Taiwan and South Korea, which are quite developed in the semiconductor industry, prefer to support national chip manufacturers only with tax breaks amounting to $16 billion and $55 billion, respectively. True, the South Korean authorities are trying to attract more private capital to the development of the industry, without abusing subsidies. Considering that large memory manufacturers represented by Samsung and SK hynix form a significant part of the South Korean GDP, the development of the national economy ultimately depends on their investment activities.
Finally, India is trying to become a major regional player, and has allocated $10 billion to subsidize the construction of chip production plants on its territory, but so far, due to the lack of experience and infrastructure, there is a preponderance towards chip testing and packaging activities. In the near future, the amount of investment in the national semiconductor sector in India may grow to $15.2 billion. The local conglomerate Tata Group is trying to build the country’s first silicon wafer processing facility, having secured not only subsidies, but also technological support from a foreign partner.
By the way, Saudi Arabia is also showing interest in developing its own semiconductor industry, and OpenAI CEO Sam Altman proposes using funds from local investors to create a network of enterprises for the production of chips for accelerators of artificial intelligence systems. However, it will be extremely difficult for the Saudi authorities to create an entire industry from scratch without the active participation of foreign technology partners.