US Aims to Reduce Dependence on Taiwan, Cooperates with Mexico to Diversify Semiconductor Supply Chain

The US Accelerates Semiconductor Supply Chain Diversification
Promotes Joint Supply Chain Development with Mexico and Canada

The United States is seeking to reduce its dependence on semiconductors from China and Taiwan, which hold a significant share in the semiconductor supply chain, and to diversify the supply chain by promoting cooperation with Mexico.

Yonhap News AFP

According to major foreign media on the 28th (local time), the U.S. Department of State announced in a statement that "under the 2022 CHIPS Act, the International Technology Security and Innovation Fund (ITSI fund) will be used to grow and diversify the global semiconductor ecosystem in cooperation with the Mexican government."

The State Department explained, "As a first step, a comprehensive assessment will be conducted on Mexico's semiconductor ecosystem status, regulatory framework, workforce, and infrastructure," adding that Mexico's Ministry of Economy, state governments, educational and research institutions, and local companies will also participate in this effort.

It continued, "The United States and Mexico are key partners to ensure that the global semiconductor supply chain can keep pace with the worldwide digital transformation," emphasizing that this will help grow Mexico's semiconductor industry and benefit both countries.

The Joe Biden administration enacted the CHIPS Act in August 2022, providing $52.7 billion (approximately 71 trillion KRW) in subsidies to expand semiconductor manufacturing facilities within the United States. The CHIPS Act also includes provisions to establish an International Technology Security and Innovation Fund totaling $500 million (approximately 675 billion KRW) over five years, with $100 million (approximately 13.5 billion KRW) allocated annually starting from fiscal year 2023.

The State Department stated that this fund will be used to promote the development and adoption of secure and reliable communication networks and to ensure the security and diversity of the semiconductor supply chain through cooperation with allies and partner countries.

Since last year, the United States has shown efforts to shift the semiconductor supply chain hub to the North American region. In January last year, the U.S. government held a summit with Canada and Mexico and formed a forum for semiconductor investment.

Earlier, in May last year, the United States launched a "Competitiveness Council" for the semiconductor industry's nearshoring (relocation of production bases to neighboring countries), solidifying its cooperative framework with Mexico.