Mexico and Brazil dither as chip supply chains are reforged

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Latin America is famous for many things, from magical realism to the Amazon rainforest. Semiconductor manufacturing is not one of them. But that could be changing. In July last year the United States and Costa Rica announced they would work together to "diversify and grow the global semiconductor ecosystem". Days later the US unveiled a similar partnership with Panama. Intel, a US chip manufacturer, then said it would invest $1.2bn in Costa Rica over two years. Mexico and Brazil, the region's biggest economies, claim to have ambitions in silicon.

Growing Latin American interest in chipmaking is driven by US attempts to loosen Asia's grip on the business. About 75% of the world's chips are made in Japan, South Korea, China or Taiwan. This irks US policymakers, partly because they covet manufacturing jobs for discontented blue-collar workers, and partly because they worry about relying on countries within China's potential sphere of influence for products as vital as chips. The protectionism these concerns have prompted may well end up boosting Latin America.

This article appeared in the The Americas section of the print edition under the headline "A tempting package"

From the March 16th 2024 edition

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