By Waldaniel Amadis | 2023-11-13

SÃO PAULO -- The United States has extended an offer to Brazil, aiming to establish it as a key ally in Latin America within the semiconductor industry.

This collaboration serves as a strategic move to thwart China's ambitions of attaining leadership in the highly lucrative semiconductor sector, which boasts an annual revenue of approximately $600 billion.

In late October, a US delegation visited the University of São Paulo (USP), Brazil's premier academic institution, which has recently earned a place among the world's top 100 universities.

This educational institution will spearhead the project aimed at luring semiconductor production to Brazil, fostering collaboration among the academic, governmental and private sectors.

The US delegation included representatives from the State Department; the Export-Import Bank of the United States; and tech industry giants like Google, Nvidia, Meta and Cloudfare, according to the media outlet Infobae.

Its objective was to explore the potential for establishing a manufacturing hub focused on small processors, which are widely employed in the mobile phone and computer industries, among others.

The InovaUSP innovation center, comprised of the engineering faculties of USP, is at the forefront of an initiative advocating for legislative measures that promote the development and regulation of the semiconductor industry, following the model implemented by the United States in 2022.

The groundbreaking CHIPS and Science Act that year in the United States secured funding of approximately $52.7 billion for the semiconductor sector, according to Reuters.

Opportunities for Brazil

The US delegation presented opportunities for technology transfer and financial support to support emerging projects in Brazil that had faced setbacks during the pandemic.

These challenges even led to the closure of the National Center for Advanced Electronic Technology (CEITEC), the sole state-owned enterprise dedicated to semiconductor manufacturing in South America, due to the burden of accumulated debts.

The government has made efforts to revive CEITEC, located in Porto Alegre, the capital of the southern state of Rio Grande do Sul. The institution had primarily focused on producing equipment for livestock tracking and digital vehicle toll collection.

"An infusion of capital is always a welcome development, and having the support of the United States, which is a global superpower, will invigorate a multitude of initiatives that had been put on hold owing to resource constraints, which Brazilian scientists were unable to pursue," explained engineer Adolfo Vásquez, a specialist in the field and a former member of the research team at the laboratory.

In addition to the USP laboratory, the Wernher von Braun Advanced Research Center in Campinas, also in the state of Sao Paulo, operates in chip production under the "fabless" model, Vásquez pointed out.

This approach allows for chip manufacturing in compact spaces of just 40 square meters, eliminating the need for spacious facilities.

In October 2022, the US Commerce Department introduced new export controls meant to isolate China from specific semiconductor chips manufactured with US equipment, as part of a broader strategy to restrict Beijing's advancements in both technology and the military sector.