Exciting news for sure but where are we going to get all of the equipment and people to run all of these new fabs?
COVID taught us a very important lesson on supply chain management and how we depend on a global ecosystem. That lesson is now being followed up by how a war can effect the supply chain compliments of Russia. The result of course is going to be supply chain redundancy around the world which will be a boom to equipment companies such as ASML, KLAC, LRCX, AMAT, and NVMI. This reshoring of semiconductor manufacturing is a good thing but it will take years to complete and the results are not guaranteed. China for example has spent hundreds of billions of dollars trying to reshore semiconductor manufacturing with mixed results.
Italy Earmarks $4.4 Billion to Boost Semiconductor Industry
The European Union last month announced a new Chips Act that aims to avert supply chain disruptions by reducing dependence on foreign sources. The bloc will for the first time allow its massive state aid funding program to be used for “first-of-a-kind” production sites in Europe, as part of a goal of producing 20% of the world’s semiconductors by 2030.
Italy will invest over 4 billion euros ($4.4 billion) to develop the domestic semiconductor industry, as it seeks to support companies transitioning to greener technologies. Prime Minister Mario Draghi’s government approved a new fund which will allocate 150 million euros in 2022 and 500 million euros each of the following years until 2030 as part of a new decree law which goes into effect Wednesday.
The money will finance research and technology in the chip sector to promote strategic independence and could in particular benefit automotive companies looking to upgrade technology to produce more energy-efficient vehicles.
Modern cars are relying more on electronics that include semiconductors:
Source: IHS, Deloitte analysis
Note: Forecasts as of April 2019.
COVID taught us a very important lesson on supply chain management and how we depend on a global ecosystem. That lesson is now being followed up by how a war can effect the supply chain compliments of Russia. The result of course is going to be supply chain redundancy around the world which will be a boom to equipment companies such as ASML, KLAC, LRCX, AMAT, and NVMI. This reshoring of semiconductor manufacturing is a good thing but it will take years to complete and the results are not guaranteed. China for example has spent hundreds of billions of dollars trying to reshore semiconductor manufacturing with mixed results.
Italy Earmarks $4.4 Billion to Boost Semiconductor Industry
The European Union last month announced a new Chips Act that aims to avert supply chain disruptions by reducing dependence on foreign sources. The bloc will for the first time allow its massive state aid funding program to be used for “first-of-a-kind” production sites in Europe, as part of a goal of producing 20% of the world’s semiconductors by 2030.
Italy will invest over 4 billion euros ($4.4 billion) to develop the domestic semiconductor industry, as it seeks to support companies transitioning to greener technologies. Prime Minister Mario Draghi’s government approved a new fund which will allocate 150 million euros in 2022 and 500 million euros each of the following years until 2030 as part of a new decree law which goes into effect Wednesday.
The money will finance research and technology in the chip sector to promote strategic independence and could in particular benefit automotive companies looking to upgrade technology to produce more energy-efficient vehicles.
Modern cars are relying more on electronics that include semiconductors:
Source: IHS, Deloitte analysis
Note: Forecasts as of April 2019.