The majority of the huge expansion of FDI into semiconductors over the past decade has been driven by three companies, namely US-based Intel, Taiwan’s TSMC and South Korea’s Samsung Group, according to figures from greenfield investment monitor fDi Markets.
Severe chip supply constraints highlighted during the Covid-19 pandemic coupled with government efforts to domesticate this strategic industry have led to massive investment into semiconductors, which are essential components to all electronic devices in use today.
Since the beginning of 2021, more than $175bn has been pledged to FDI projects in the semiconductor sector, with the majority going towards highly capital-intensive new foundries to produce microchips, according to fDi Markets. This announced capital expenditure was about 60% of the total invested over the past decade.
Governments around the world have pushed to domesticate the semiconductor industry and woo chipmakers to set up production facilities through generous incentives. This is most noticeable in the US, where $52bn has been pledged to boost the domestic supply chain. Meanwhile, India has paid out $10bn to help develop local chip fabrication plants (fabs) and encourage research and innovation in the sector.
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