Germany's ambitious plans to become a hub for semiconductor manufacturing, involving major players like Intel and TSMC, have hit a significant roadblock following a recent ruling by the country’s Federal Constitutional Court. The court deemed the government's reallocation of €60 billion from pandemic support measures to its Climate and Transformation Fund in 2022 unconstitutional. This fund, intended to cover about €210 billion for 2024 to 2027, included subsidies for setting up local chip factories by Intel and TSMC.
In an electrifying turn of events, the semiconductor industry is poised for a robust recovery, as forecasted by the International Data Corporation (IDC). The sector, crucial to the global electronics industry, is set to witness a 20.2% growth in 2024, escalating the market to a staggering $632.8 billion. This upward revision from IDC’s previous estimate of $625.9 billion signals a pivotal shift, marking the industry's departure from a recent slump.
In a strategic move to revive its position in the global semiconductor market, the Japanese government has announced a substantial investment of approximately 2 trillion yen ($13 billion). This funding, aimed at rejuvenating Japan's chip industry, forms part of a wider strategy to restore the nation's former prominence in this critical sector, according to Bloomberg.
The intensifying dynamics over Taiwan have heightened the risk of a direct clash between China and the U.S., a situation with grave global implications, writes the Crisis Group in their latest report.
The ripple effect of production, supply, and shipping disruptions on businesses' financial health has been pronounced, especially in recent times. Such disruptions have led to heightened costs for products, impacting consumer prices and eroding company profit margins. This challenge has been particularly felt since the outbreak of the pandemic. As a result, some companies across sectors like retail and aerospace have succumbed to bankruptcy, with supply chain hurdles being a prime factor.
The leaders of the US and China, two of the world's superpowers, are making strides towards a critical meeting next month, reports Reuters. US officials announced that both nations have agreed to work collaboratively on a planned summit between Presidents Joe Biden and Xi Jinping, following comprehensive talks in Washington. These discussions saw Chinese foreign minister Wang Yi engage with senior US diplomats, marking the first such visit by a Chinese foreign minister to Washington since 2018.
In August, German industrial orders witnessed a noteworthy bounce back, outpacing expectations, primarily due to a surge in the manufacturing of computing, electronic and optical products. However, the future for this sector still holds its fair share of uncertainties.
China's rise and fall as the "factory for the world" is a complex story, writes Chng Boon Huei in EPS News. The country's initial success was due to its abundant cheap labor, supported by government policy and investment. However, in recent years, China has become more expensive, and its manufacturing sector has been disrupted by the trade war with the United States, the COVID-19 pandemic, and global supply chain shortages.
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