Between two parties, the third gains? Lmicrochip industry, which powers the technology of the future, from cell phones to electric cars, through robotics and Industry 4.0, has become enormously strategic: on a global level today it is already worth 664 billion of dollars, but within ten years it will be worth at least triple, according to analysts. To date, they are competing for this market United States and China, or better to say Asia, since only a Taiwan 93% of all world production of the most advanced technology microchips is concentrated and almost all of the necessary raw materials are found on the continent. While Europe does not touch the ball (apart from Holland which produces the machinery for the production), on the international stage there is another country which already has an important role in the microchip production chain, and which would like to become even more of a protagonist: Lula's Brazil, which does not manufacture these precious and tiny contraptions, but which is the world leader in testing phases, finishing and encapsulation.
The relaunch of the state company that deals with a segment of the production chain
The company that takes care of all this is public, is called CEITEC, is based in Porto Alegre and while Bolsonaro had dismantled it, trying unsuccessfully to privatize it and only obtaining an increase in liabilities, which last year rose to 165 million reais, Squid wants instead relaunch it ambitions and for this reason he has recently announced an injection of public money for 500 million reais, a sort of renationalisation with a capital increase. Despite the slowdown in activity under Bolsonaro, also due to the pandemic, CEITEC has proven to be a strategic asset, given that investing in it would not only increase supply to respond to the increase in global demand, making Brazil take on an important role behind the USA and China, but would also serve to support the growth of internal market of the same South American country, starting with the automotive sector, which due to the CEITEC stalemate produced 250 thousand vehicles less than expected in 2022 and 370 thousand less in 2021 (Anfavea data, the Brazilian association of car manufacturers).
Lula aims to become the third largest semiconductor market in the world
Lula has clear ideas: to make Brazil the third place in the world of the thriving market of semiconductors, attempting on the one hand to consolidate the privileged relationship with Beijing (in the last meeting of this year, Lula and Xi Jinping signed specific industrial agreements that include microchips), but also to benefit from Washington's new nearshoring strategy, which it is increasingly focusing on nearby Latin America, starting with Mexico, to bring production once relocated to Asia back home. That of the Brazilian president it's still a gamble, given that according to the local press the maintenance of an operations room at CEITEC alone, the one essential for preserving and avoiding contamination of the processors, costs 25 million reais per year. Furthermore, the temporary closure under the Bolsonaro government has caused Brazil to lose part of the know-how it had in its segment, after some technicians have in the meantime been hired by companies in Taiwan and the United States.
Also for this reason, however, state intervention is essential, as demonstrated by the United States itself, which despite already having a substantial market share, last year approved the Chips and Science Act, a 52,7 million dollar plan. billions of dollars from public coffers to support the sector. Thanks to this stimulus, private individuals have in turn announced 210 billion dollars in new investments. In the case of the USA, the objective is to counter China, in that of Brazil it is – perhaps – to become the third wheel.
