July 18 - In a bid to reduce reliance on Asia and enhance chip packaging capabilities within the Americas, the U.S. government has launched an initiative aimed at strengthening Latin American chip packaging capacities. Notably, Intel already operates an assembly, testing, and packaging plant in San Jose, Costa Rica. However, it remains unclear if Intel will benefit from the new initiative.
A statement on the initiative's website highlights the importance of bolstering semiconductor manufacturing and securing the supply chain to prevent any single country or region from monopolizing the critical chip packaging industry.
A significant feature of the U.S. government's CHIPS and Science Act is that, despite increased semiconductor production in the U.S. by the end of this decade, most of these semiconductors will need to be packaged in Asia, complicating the supply chain.
On July 17, U.S. Secretary of State Antony Blinken announced the launch of the Western Hemisphere Semiconductor Initiative (CHIPS ITSI) at the Americas Partnership for Economic Prosperity (APEP) Ministerial Meeting in Washington. The U.S. State Department and the Inter-American Development Bank (IDB) aim to enhance semiconductor assembly, testing, and packaging (ATP) capabilities in key partner countries such as Mexico, Panama, and Costa Rica. The initiative will support public-private partnerships and adopt recommendations from the Organization for Economic Cooperation and Development (OECD) to develop the semiconductor ecosystems in these countries. The initial projects will be undertaken in Mexico, Panama, and Costa Rica, with plans to expand to other countries in the Americas.
Under the initiative, the ITSI Fund will provide $500 million over five years starting from fiscal year 2023. An annual allocation of $100 million will promote the development and adoption of secure and reliable telecommunications networks and ensure the security and diversification of the semiconductor supply chain. This indicates that the initiative will address both semiconductor ATP capabilities and telecommunications network development.
A statement on the initiative's website notes, "The ultimate goal is to introduce new trusted ICT suppliers and semiconductor production capabilities to the global market, directly benefiting the United States and its allies and partners."
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