The US Department of State, in partnership with the Inter-American Development Bank (IDB), has launched the CHIPS ITSI Western Hemisphere Semiconductor Initiative, aimed at bolstering semiconductor assembly, testing, and packaging (ATP) capabilities in Mexico, Panama, and Costa Rica. This initiative, funded by the CHIPS Act, will support public-private partnerships and align with OECD recommendations to strengthen regional semiconductor ecosystems.
“The ultimate goal is to bring new trusted information and communications technology vendors and semiconductor production capacity into the global market, in ways that will directly benefit the United States as well as our allies and partners,” a statement on the initiative’s website reads.
The programme, set to run from 2024 to 2026, has been framed as a move to enhance regional capabilities, prevent monopolies in the chip packaging sector, and diversify supply chains. However, the initiative has been met with mixed reactions.
Some analysts see this as a positive step. Yahoo Finance reports that it aligns with the broader goals of the CHIPS and Science Act to bring semiconductor production closer to home, potentially reducing reliance on Asian markets. The $500 million investment over five years is expected to not only boost semiconductor ATP capabilities but also contribute to the development of telecommunications networks, aligning with the IDB’s ongoing efforts to enhance regional semiconductor supply chain competitiveness.
However, others are more sceptical. The Global Times, a Chinese state-affiliated media outlet, has questioned the US’s motives and the potential impact on Latin American countries. It argues that the initiative may be “lip service” and a way for the US to establish “small cliques of allies” in the Americas. It further claims that while the US might bring some investment in back-end semiconductor manufacturing, it won’t be enough to significantly boost the overall development of manufacturing in these countries.
The success of this initiative will depend on several factors, including the willingness of Latin American countries to invest in their semiconductor ecosystems, the effectiveness of public-private partnerships, and the ability of the US to deliver on its promises. The coming years will reveal whether this initiative is a genuine effort to boost regional economies or a strategic manoeuvre in the global chip war.
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