15 November 2023 · 2 min read
Author: Matilde Castleberry
Around the world, a 'Semiconductor Surge' is reshaping - and reshoring - industries, as nations invest heavily to secure their positions in the chips landscape.
Just as the EU is taking strategic steps to enhance its semiconductor industries - as discussed in our previous article - and secure its position in the technology landscape, countries worldwide are strategically investing in chips to bolster domestic production and technological capabilities.
We will now embark on a journey through worldwide investments in the semiconductor industry. We will hop from one country to another unveiling the initiatives that promise to ensure self-sufficiency and security at the nanoscopic and global level. Hold tight and don’t forget your tickets!
With no surprise, our first ticket is to Taiwan. The world’s largest chip producer is such thanks to constant attention towards the sector, as demonstrated by the latest investments in fabrication facilities and new technology. For more than four decades it has offered a favourable investment ecosystem providing water electricity and land as well as tax incentives. The country offers incentives covering 50% of land acquisition expenses and 45% of construction and facility costs. In 2020 Taiwan announced a € 315 million investment that would attract foreign companies to establish chip R&D facilities on the island. Moreover, according to a recently passed legislation, R&D is supported by turning 25% of expenses into a tax credit.
Taipei’s capacity for foreseeing challenges and correctly allocating investments has secured the nation’s status as a preferred location for semiconductor manufacturers for almost half a century.
Moving 1483 km northeast from Taipei we land in Seoul. In 2022 alone, South Korea’s wafer fabrication output represented a 17% share of the global market. Its influence extends into the memory chips sector where domestic companies hold nearly 70% of the global market share. Just like Taiwan, South Korea has an attentive and generous budget allocation when it comes to chips. In 2021 Seoul announced the ‘K-semiconductor belt strategy’ strengthening water and power supplies and building the world’s largest semiconductor supply chain by 2030. Tax credits were raised to 50% on R&D and 20% on facility investment to attract a €423 billion investment from the private sector in the domestic semiconductor industry. On March 30, 2023, a further investment plan was unveiled, the so-called ‘K-Chips Act’. It aims at increasing tax credit from 8% to 15% for big companies investing in manufacturing facilities, and up to 25% for smaller ones.
In Seoul, just as in Taipei, we can have a glimpse of tomorrow’s semiconductor ecosystem through their meticulous investments in the semiconductor industry. The nation's commitment to fostering innovation is setting a promising course for the industry.
South Korea closes the first part of our journey on the Semiconductor express. But the adventure is far from over! So, secure your tickets, lay back, and get ready to explore Japan and the USA’s initiatives to power the semiconductor sector!