The battle for chip supremacy is heating up…Japan, India, China all have plans to build chip factories. Europe, of course, doesn’t want to get left behind…
The EU has already passed a €45 billion plan to boost its market share in semiconductors, from 8% to 20% by 2030.
But last week, Wednesday, 1 February 2023, The European Commission proposed increased levels of state aid, so Europe can compete with the US as a manufacturing hub.
What this means is…
A massive build-up of semiconductor capacity will begin in Europe…
In fact, there’s already been announcements relating to the construction of semiconductor manufacturing facilities in the EU.
For example, in 2022, Intel announced its plan to build new chip plants in Germany, France, Italy and Ireland. The company is also investing €12 billion into an existing chip manufacturing facility in Ireland.
Then, two other semiconductor companies are teaming up to build a manufacturing factory in France, which could be worth around €5.7 billion.
As French finance minister Bruno Le Maire, said,
“This is the biggest industrial investment in recent decades outside of the nuclear sector and a big step for our industrial sovereignty.”
But that’s not all,
On 1 February 2023, it was announced that a $3 billion chip plant and a research and development centre will be built in Germany. Construction is expected to start within months. Once finished, it is expected to rank as the world’s biggest Silicon Carbide (SiC) chip facility.
SiC is used in many applications that need a hard, heat-resistant substance i.e. vehicle brakes. But the material is also making waves in the chip industry.
Its semiconductor properties, along with a heat resistance several times higher than regular silicon, make it an ideal material for the power electronics used in Electric Vehicles (EVs).
Not only is it more capable than silicon when it comes to heat, but it also is more efficient, meaning more energy flows from the batteries to the tires, or from the charging station plug to the battery.
It’s perfect for chips controlling electric motors, converting electrical power and fast vehicle charging.
One of my top renewable energy plays for 2023
And the company involved in building this massive facility is one of my top stock picks for 2023.
They’re the leader in Silicon Carbide (SiC) chip manufacturing.
Ed Note: In 2022, the US Government signed The CHIPS and Science Act into law. It’s a $50 billion plan to incentivise the reshoring of lost semiconductor manufacturing capacity.
Securing semiconductors supply is imperative for governments and companies as exciting tech trends shape our future world.
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