Brazil is looking to diversify its chip supply chain as a result of Taiwan’s growing tensions with China and the U.S.
Brazil and South Korea have signed a memorandum of understanding regarding the establishment of a chip and semiconductor facility in Brazil. Brazil’s Minister of Communications Fábio Faria last week revealed that South Korean chipmaker Samsung is at the center of these negotiations.
Faria expressed concern that the chip and semiconductor market depends so heavily on Taiwanese production, because the region is currently facing geopolitical tensions with China and the United States. As a result, Brazil is looking to diversify its supply chain. The Latin American country is not alone in this worry — supply chain constraints in the semiconductor industry have plagued the global market since the covid pandemic and then were worsened by the war in Ukraine.
According to the minister, the potential plan is for Samsung to build a factory in Brazil that would produce semiconductor parts for the local industry, as well as be exported to countries in Latin America, Europe and Africa. He claimed that Brazil is a “strategic point” for such a plan.
Faria also shared that there were attempts made years ago to discuss a possible plant in Brazil with Intel. However, he said that nothing came of such attempts and ultimately, Intel opened a new factory in Costa Rica in 2008 and then closed it six years later.
Samsung appears to have been looking to expand its production footprint prior to the memorandum with Brazil’s government. In 2021, for instance, the company announced a $17 billion investment in a new fab in Taylor, Texas to boost production of advanced semiconductors. The facility is expected to be operational in the second half of 2024.
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